UNIVERSITY   OF   CALIFORNIA 

COLLEGE    OF    AGRICULTURE 
AGRICULTURAL   EXPERIMENT  STATION 

CIRCULAR  No.  247 

June,  1922 

COLONIZATION  AND  RURAL  DEVELOPMENT 
IN  CALIFORNIA* 

By  ELWOOD  MEAD,  C.  F.  SHAW,  E.  L.  ADAMS 
and  J.  W.  GEEGG 


CONTENTS  page 

Foreword 3 

What  should  be  the  next  step  in  rural  development,  by  Elwood  Mead 5 

Existing  conditions 5 

California  needs  American  settlers 5 

Rural  development  is  costly 6 

Progress  in  canal  building 7 

Closer  settlement  must  go  hand  in  hand  with  canal  building 7 

Where  settlers  are  needed 9 

Why  the  state  should  promote  closer  settlement 9 

Principles  which  should  govern  credit  to  settlers 10 

State  and  national  agencies  must  work  together 10 

What  settlement  plans  should  include 11 

The  advantages  of  small  farms 11 

What  credit  for  land  settlement  will  accomplish 14 

The  average  capital  of  land  seekers 14 

The  federal  land  bank 16 

The  Wisconsin  plan 16 

Would  the  Wisconsin  plan  succeed  in  California 17 

The  California  state  land  settlement  act 18 

Homes  for  farm  laborers 18 

The  spheres  of  public  and  private  enterprise  in  land  settlement 19 

Land  settlement  should  be  kept  free  from  political  interference 20 

Importance  of  long-time  payments  and  low  interest  rates  in  future  land 

settlement 21 

The  importance  of  the  three  million  dollar  bond  issue 28 

Settlers  underwrite  state  loans 29 

Rural-minded  people  long  to  secure  homes  in  California 29 

Selecting  land  for  settlement,  by  Chas.  F.  Shaw 31 

*  A  short  course  in  land  settlement  was  given  at  the  College  of  Agriculture, 
Berkeley,  September,  1921.  This  circular  includes  the  addresses  delivered  in  that 
course  by  Elwood  Mead,  Professor  of  Rural  Institutions,  C.  F.  Shaw,  Professor 

of  Soil  Technology,  E.  L.  Adams,  Professor  of  Farm  Management,  and  J.  W. 
Gregg,  Professor  of  Landscape  Gardening  and  Floriculture. 


Z  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

PAGE 

Capital  required  by  California  settlers,  by  R.  L.  Adams 39 

Importance  of  capital 39 

Capital  covers  cash  and  credit 39 

Capital  needs  are  variable 39 

Estimating  and  grouping  capital  needs 40 

Cost  of  building  equipment 42 

Cost  of  implements  and  machinery 45 

Cost  of  work  stock  and  other  livestock 46 

Cost  of  minor  equipment 47 

Estimating  possible  returns 48 

The  safety  factor 49 

Sum  to  meet  living  expenses : 49 

Income-producing  capacity  of  fully  developed  lands  and  plantings 50 

Costs  and  returns  during  the  period  of  establishing 52 

Capital  requirements  of  selected  California  farms 52 

Variations  in  capital  requirements 52 

Business  selected  as  typical 54 

The  diversified  farm 57 

Twenty  acres  for  deciduous  fruit 61 

Dairy  and  hog  ranch 61 

Two  thousand  fowl  poultry  plant 64 

Rural  planning,  by  J.  W.  Gregg 67 

Size  of  the  grounds 70 

Building  site 70 

Outline  of  grounds 70 

Driveways  and  yards 70 

Buildings 71 

Home  Orchard 72 

Shade  trees 72 

Ornamentation 72 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA       3 


FOREWORD 

California  made  land  settlement  a  matter  of  public  interest  and 
effort  when  the  legislature  of  1917  passed  the  Land  Settlement  Act 
under  which  two  rural  communities,  Durham  and  Delhi,  have  been 
created.  This  action  was  taken  by  the  legislature  because  of  the  need 
for  more  careful  study  of  conditions  of  soil,  climate,  and  water  supply 
than  private  enterprise  is  inclined  to  make,  and  for  the  better  organ- 
ization of  the  settlers  in  the  state.  In  carrying  out  the  provisions 
of  the  act  of  1917,  the  State  Land  Settlement  Board  has  employed 
distinctive  methods,  the  chief  points  of  which  are  the  following : 

1.  The  soil,  and  the  water  supply,  and  educational,  health,  and 
market  conditions  are  studied  by  experts  before  the  land  is  bought. 
The  size  of  farms,  the  kind  of  agriculture  suited  to  the  locality,  and 
the  cost  of  developing  a  farm  are  investigated  in  order  that  settlers 
may  be  given  expert  advice  and  direction. 

2.  The  payments  on  land  are  amortized  and  extend  over  36!/2 
years,  with  interest  at  5  per  cent. 

3.  Settlers  are  helped  to  organize  for  cooperation  in  development, 
and  to  buy  and  sell  as  a  community. 

4.  Settlers  are  loaned  money  to  complete  development  or  to  buy 
live  stock  and  equipment.  ;   M  ,  I 

5.  Homes  for  farm  laborers  are  provided.  ■  •    ■  " 

These  land  settlement  methods  and  policies  evoked  a  widespread, 
keen  public  interest.  Between  January  1  and  November  1,  1921,  about 
eight  thousand  letters,  from  every  state  in  the  Union,  were  received 
at  the  land  settlement  headquarters  at  Berkeley.  The  writers,  one  and 
all,  expressed  the  desire  to  live  in  California  and  the  belief  that  the 
Land  Settlement  Act  would  enable  them  to  gratify  this  desire.  A 
study  of  these  letters  revealed  the  following  facts : 

1.  The  innate  desire  of  the  American  to  own  a  home  is  as  strong 
today  as  in  the  pioneer  period,  but  other  matters  than  land  are  also 
regarded  as  important.  Nearly  all  writers  inquire  about  schools, 
roads,  cooperation,  and  social  advantages. 

2.  Few  of  the  inquirers  have  capital  enough  to  buy  a  farm  without 
more  generous  credit  than  is  given  in  private  bargaining.  The  capital 
of  four-fifths  of  them  ranges  from  one  thousand  to  five  thousand 
dollars. 


4  UNIVERSITY  OF  CALIFORNIA — EXPERIMENT  STATION 

3.  A  change  has  come  about  in  the  American  viewpoint  as  to  the 
size  of  a  farm.  One  hundred  sixty  acres  is  no  longer  regarded  as  the 
proper  farm  unit  in  California.  Few  writers  ask  for  more  than  40 
acres ;  about  half  desire  a  farm  laborer 's  allotment. 

There  is  urgent  need  today  for  a  credit  system  which  will  provide 
a  longer  time  of  payment  and  lower  rates  of  interest  than  private 
enterprise  can  afford  to  offer,  and  which  can  be  given  through  state 
or  national  aid  or  through  the  cooperation  of  the  state  and  private 
companies.  Many  settlers  occupying  large  areas  of  land  in  California 
are  interested  in  such  a  policy.  Cooperation  between  the  state  and  the 
federal  government  would  make  possible  more  liberal  terms  under  the 
Federal  Farm  Loan  Act.  What  may  be  done  through  such  cooper- 
ation is  discussed  under  the  proposed  credit  measure  on  page  28. 

The  people  of  California  at  the  next  general  election  will  have  an 
opportunity  to  further  state  colonization  by  voting  for  the  three- 
million-dollar  bond  issue  authorized  by  the  legislature  of  1921.  Of 
the  proceeds  of  this  bond  issue,  $1,000,000  would  reimburse  the  state 
for  money  already  expended  on  the  Delhi  colony,  and  $2,000,000 
would  constitute  a  fund  toward  the  next  step  in  state  colonization. 
How  this  sum  may  be  used  to  create  not  one,  but  several,  additional 
colonies  is  outlined  on  page  28. 

The  problem  of  land  settlement  is  that  of  relating  man  properly 
to  the  land.  The  College  of  Agriculture  believes  that  the  working 
out  of  this  problem  is  fundamental  and  that  upon  this  factor  more 
than  any  other  depends  the  future  rural  civilization  of  California. 
To  encourage  a  wider  study  and  a  better  understanding  of  the  subject 
a  short  course  in  colonization  and  rural  development  was  given  at 
Berkeley  in  September,  1921. 


ClRCULxVR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA       5 


WHAT  SHOULD  BE  THE  NEXT  STEP  IN  RURAL 

DEVELOPMENT ! 

By  ELWOOD  MEAD 


EXISTING   CONDITIONS 

California  has  passed  through  the  first  phase  of  state  land  coloniza- 
tion and  rural  development.  This  phase  was  educational.  The  state 
colonies  at  Durham  and  Delhi  are  now  going  concerns.  They  demon- 
strate what  can  be  done. 

The  purpose  of  this  paper  is  to  review  conditions  and  discuss  the 
task  that  lies  before  us.  No  country  in  the  world  has  more  to  gain 
from  a  carefully  planned  and  rapid  rural  development '  than  has 
California.  Great  areas  of  land  capable  of  being  irrigated  are  now 
growing  grain.  They  ought  to  be  subdivided  and  made  to  grow  vines, 
orchards,  and  alfalfa.  Where  there  is  now  one  family,  thirty  families 
could  live  in  comfort.  To  bring  about  these  changes,  large  holdings 
must  be  broken  up.  People  must  be  found  who  will  buy  small  farms. 
These  people  should  not  only  be  good  cultivators,  but  good  American 
citizens. 

These  changes  will  not  only  create  a  new  agriculture,  but  a  new 
and  better  rural  life.  The  character,  habits,  and  ideas  of  those  who 
are  to  occupy  these  farms  will  have  a  unique  significance.  They  may 
be  of  the  same  ancestry  as  the  California  pioneers.  They  may  come 
from  various  races  of  peoples,  and  so  make  as  great  a  change  as  was 
wrought  by  the  influx  of  gold  seekers,  which  brought  in  so  many 
Anglo-Saxons  that  the  early  Spanish  population  was  submerged. 
When  the  feudal  estates  of  France,  Denmark,  and  Germany  were 
broken  up,  there  was  no  change  in  the  life  or  habits  of  the  people, 
but  when  the  great  grain  farms  of  California  are  broken  up,  the  new 
owners  may  be  as  different  from  the  present  ones  in  race  and  habits 
of  living  as  the  Anglo-Saxon  gold  seeker  was  from  his  Spanish  prede- 
cessor. 

CALIFORNIA    NEEDS    AMERICAN    SETTLERS 

If  rural  California  is  to  continue  American,  it  must  be  peopled 
by  American  settlers.  The  farmers  must  have  the  education,  politi- 
cal ideals,  social  habits,  and  traditions  of  the  American  pioneer  who 
made  California  what  it  is.    This  means  that  they  should  come  mainly 


b  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

from  the  great  agricultural  areas  to  the  east  of  us.  Now  is  the  time 
to  insure  this  result.  The  subdivision  and  settlement  of  the  great 
landed  estates  affords  an  opportunity  to  select  the  settlers  which 
should  not  be  ignored.  Land  settlement  is  not  simply  a  concern  of 
the  land  owner  or  of  the  land  salesman.  Land  is  a  social  and  political 
asset  in  which  all  people  of  the  country  have  an  interest.  The  people 
who  make  the  rural  life  of  California  today  will  shape  the  city  life 
of  a  quarter  of  a  century.  The  people  of  our  great  agricultural 
valleys  will  do  more  than  raise  crops :  they  will  shape  the  future  poli- 
tical, moral,  and  social  life  of  the  state. 

RURAL    DEVELOPMENT    IS    COSTLY 

So  much  for  the  human  and  political  aspects  of  settlement.  There 
is  also  an  urgent  need  for  a  closer  settlement  as  a  support  to  irriga- 
tion development.  Millions  of  dollars  have  been  invested  in  reservoirs 
and  canals  to  water  land  which  is  not  now  cultivated  as  success  in 
irrigation  requires.  This  land  cannot  be  so  cultivated  by  its  present 
owners;  they  can  not  afford  to  make  the  improvements;  they  cannot 
make  the  large  farm  pay.  The  small  farm  cultivated  by  its  owner 
gives  the  best  results  in  money  as  well  as  in  political  and  social  condi- 
tions. Alfalfa,  stock,  farms,  orchards,  and  vineyards  are  needed  to 
pay  water  charges  and  meet  interest  on  high  priced  land. 

In  a  discussion  of  how  to  secure  desirable  settlers  for  vacant  lands, 
E.  F.  Benson,  manager  of  Immigration  and  Industry  of  the  Northern 
Pacific  Railroad,  recently  said,  ' '  I  think  there  is  just  one  answer : 
'Make  a  place  for  them/  Reverse  the  order  as  heretofore  practiced 
in  this  country — painting  a  bright  picture  of  the  land  far  away  and 
then  confining  our  efforts  of  land  settlement  to  'mere  land  selling/ 
Instead,  organize  the  land  owners  into  helpful  and  carefully  planned 
community  development  colonization  associations.  Make  it  safe,  com- 
fortable, and  attractive  for  the  man  with  two  or  three  thousand 
dollars  to  become  the  owner  of  a  farm  home  that  will  yield  a  living 
for  him  and  his  family,  pay  the  taxes  and  interest  and  ultimately  the 
debt  on  the  farm,  educate  the  children,  and  provide  amusement  and 
social  advantages  for  the  women  and  children  especially,  make  needed 
improvements  for  the  family's  comfort  and  pleasure,  and  finally  lay 
up  a  modest  sum  for  old  age.  Less  than  that  is  not  an  attractive 
proposition.  More  is  an  unreasonable  expectation  for  the  usual  and 
average  man.  The  unusual  and  extraordinary  man  can  do  much  more 
on  the  farm  or  elsewhere,  but  his  number  is  limited.  The  public 
welfare  is  based  on  the  success  of  the  average  man  and  I  am  assuming 
a  sum  of  approximately  $2000  as  his  total  capital. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA       7 

"Should  you  discuss  this  proposition  of  helpful  colonization  devel- 
opment with  almost  any  western  business  man  or  professional  man  he 
will  very  likely  start  in  to  tell  you  how  much  he  thinks  of  the  good 
old  doctrine  of  personal  independence,  initiative,  and  thrift,  which 
he  will  illustrate  by  telling  of  his  grandparents,  or  if  an  elderly  man, 
possibly  his  parents.  He  will  tell  how  they  labored  and  saved  and 
sacrificed,  denying  themselves  not  only  all  the  luxuries  but  many  of 
the  comforts  of  life,  perhaps  breaking  down  their  health,  and  how 
they  won,  educating  the  children  and  acquiring  a  comfortable  com- 
petence for  old  age,  and  all  of  this  without  any  help  whatsoever.  But 
the  answer  to  such  men  is  this :  The  hardships  and  privations  which 
your  parents  suffered  is  probably  the  reason  why  you  are  not  travel- 
ing that  road.  And  another  reason  is  that  the  cheap  lands  available 
for  settlement  a  generation  ago  are  all  taken.  Too  few  people  are 
following  the  example  of  their  ancestors  in  the  development  of  farm 
homes  on  our  vacant  lands." 

PROGRESS    IN    CANAL    BUILDING 

The  last  report  of  the  State  Water  Commission  shows  that  the 
state  has  68  irrigation  districts  created  under  the  Wright  act.  Of 
these,  25  have  been  organized  during  the  last  three  years.  Hundreds 
of  thousands  of  dollars  have  been  spent  in  surveys  and  in  the  employ- 
ment of  experts  to  make  sure  that  the  reservoirs  and  canals  which  are 
to  water  these  districts  should  fulfill  their  purpose.  Everyone  realizes 
that  this  preliminary  study  and  organization  had  to  precede  construc- 
tion, that  the  whole  undertaking  had  to  be  thought  out  to  its  finish 
before  the  first  shovelful  of  earth  was  turned.  In  addition,  the  state 
exercises  a  supervision,  and  will  not  permit  bonds  to  be  issued  or  sold 
until  the  feasibility  of  each  project  has  been  established  by  its  experts. 

CLOSER    SETTLEMENT    MUST    GO    HAND     IN     HAND    WITH    CANAL    BUILDING 

Other  countries  long  ago  learned,  and  we  are  beginning  to  learn, 
that  providing  water  for  irrigation  does  not  create  irrigated  agricul- 
ture. Unless  there  are  settlers  to  cultivate  the  land  and  money  to 
improve  farms  so  that  water  can  be  used  at  a  profit,  an  irrigation 
canal  is  a  liability.  The  situation  in  scores  of  districts,  not  in  Cali- 
fornia alone,  but  all  over  the  arid  West,  is  well  stated  in  a  letter, 
recently  received,  about  the  plight  of  one  district : 

The  District  had  been  bonded  for  about  $ ■.     Funds  gave  out  before 

water  was  made  available,  and,  as  a  result,  water  assessments  became  delinquent 
and  interest  on  bonds  was  not  met.  Without  water  there  was  no  hope  of  making 
the  District  solvent,  so  former  bond  holders  came  forward  with  a  second  issue  and 
an  adequate  water  supply  was  provided. 


0  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

This  did  not  end  the  difficulty.  The  greater  part  of  the  land  is  uncleared. 
Its  owners  are  unable  to  meet  the  heavy  assessments  made  necessary  on  account 
of  the  financial  burden  being  thrown  on  a  few  and  accumulating.  Instead  of 
water  costing  $2.00  or  $3.00  an  acre,  it  costs  nearly  $9.00  an  acre. 

In  order  to  promote  settlement  and  development,  the  land  owners  of  the  District 
organized  and  optioned  a  part  of  their  holdings  to  the  extent  of  6000  acres  and 
agreed  to  accept  a  second  mortgage  as  payments  were  made  to  clear  up  back  taxes 
and  accrued  penalties.  These  owners  agreed  to  accept  $30.00  an  acre  for  the  land 
and  out  of  that  to  pay  up  the  penalties  and  back  taxes.  In  some  cases  this 
amounts  to  $30.00  so  that  the  owners  would  receive  nothing. 

On  this  basis  it  would  cost  over  $200  an  acre  simply  to  put  a  20- 
acre  farm  in  shape  for  a  settler  to  live  on  it  and  begin  its  cultivation ; 
and  the  question  is,  where  is  that  $200  an  acre  to  come  from.  Later 
on  it  will  be  seen  that  only  a  small  fraction  of  the  worthy  and  indus- 
trious people  who  want  to  get  farms  in  California  have  this  amount 
of  capital  and  this  raises  the  question,  should  there  not  be  some  way 
to  raise  money  for  the  improvement  of  farms  through  the  issue  of 
tax-free  securities,  as  we  now  raise  money  through  the  sale  of  tax-free 
irrigation  district  bonds  to  build  works  for  providing  water. 

It  will  take  hundreds  of  millions  of  dollars  to  improve  the  small 
farms  under  existing  and  proposed  irrigation  districts  so  that  the  tens 
of  thousands  of  people  needed  to  cultivate  these  farms  can  live  on 
them.  The  relation  of  settlement  and  of  financing  settlers  to  irriga- 
tion development  is  shown  in  the  situation  of  the  Madera  irrigation 
district. 

Of  the  350,000  acres  in  this  district,  over  200,000  are  held  in  tracts 
of  from  1,000  to  60,000  acres.  These  large  areas  are  all  grain  farms, 
and  before  irrigation  can  be  installed,  the  surface  of  the  land  must 
be  smoothed  off.  The  cost,  together  with  the  cost  of  the  distributing 
ditches  will  be  not  less  than  $50.00  an  acre.  The  owners  of  these 
large  tracts  of  land  cannot  raise  this  money  and  it  will  be  unprofitable 
for  them  to  try  to  cultivate  the  land  in  large  holdings.  Few  people 
can  irrigate  large  areas  at  a  profit — irrigation  pays  only  on  the  small 
farm.  Subdivision  and  closer  settlement  must  therefore  follow  on  the 
heels  of  canal  building.  The  plans  for  this  cannot  wait  until  water 
is  ready.  This  area  will  provide  homes  for  10,000  families;  ten 
thousand  new  houses  will  be  required.  Plans  for  building  homes, 
buying  farm  equipment,  organizing  these  settlers  to  work  together 
for  business  and  social  ends  must  be  worked  out  in  advance. 


Circular  247 J   colonization  and  rural  development  in  California     9 


WHERE  SETTLERS  ARE  NEEDED 

Few  realize  the  extent  of  irrigable  land  awaiting  closer  settlement 
and  the  necessity  for  early  action  in  making  it  ready  for  the  people 
waiting  and  wishing  to  make  homes  on  it.  There  are,  in  round  num- 
bers, 3,000,000  acres  of  land,  in  the  68  irrigation  districts  already 
organized  in  the  state.  They  include  Madera  district  with  350,000 
acres,  Merced  with  200,000,  Glenn-Colusa  103,000,  Honcut-Yuba 
50,000,  Corcoran  48,000.  Surveys  and  plans  have  been  completed, 
or  are  nearing  completion,  for  the  formation  of  large  additional  dis- 
tricts. The  Iron  Canon  project  has  300,000  acres,  Kern  Delta  400,000, 
Klamath-Shasta  100,000,  Mendota  87,000,  Suisun  41,000,  West  San 
Joaquin  208,000,  and  Yolo  50,000.  The  federal  government  is  pre- 
paring plans  for  irrigating  300,000  acres  above  the  present  Imperial 
irrigation  district.  The  old,  the  new,  and  the  proposed  districts  have 
a  total  area,  in  round  numbers,  of  four  and  one-half  million  acres. 

We  have  an  admirable  scheme  for  financing  the  construction  of 
works.  We  have  greater  need  for  a  credit  scheme  for  buying  and 
improving  the  small  farm.  Aid  and  advice  in  choosing  a  farm  and 
credit  to  insure  its  prompt  and  prosperous  development  is  the  key 
to  future  agricultural  development  in  this  state. 

WHY   THE    STATE    SHOULD    PROMOTE    CLOSER    SETTLEMENT 

Think  what  it  would  mean  to  California  if  the  million  acres  of  land 
included  in  what  is  known  as  the  Miller  and  Lux  Estate,  the  great 
tracts  of  land  belonging  to  the  Kern  County  Land  Co.,  the  60,000 
acres  of  fertile  land  belonging  to  the  Sutter  Basin  Co.,  and  the  tens 
of  thousands  of  acres  belonging  to  the  Natomas  and  other  companies 
were  all  closely  settled  by  American  farmers,  owning  their  own  land 
and  living  in  their  own  houses.  On  these  properties  where  irrigation 
works  have  already  been  built  and  on  the  part  of  the  land  that  is 
fertile  and  suited  to  intense  culture,  a  hundred  colonies  like  those  at 
Durham  and  Delhi  could  be  created,  and  if  those  colonies  had  homes 
for  farm  laborers  and  were  peopled  by  educated,  intelligent,  patriotic 
American  citizens,  we  would  have  a  rural  life  in  California  that  would 
be  the  envy  and  admiration  of  the  rest  of  the  country,  and  we  could 
cease  worrying  about  the  importation  of  cheap  farm  labor  or  the  alien 
ownership  of  land. 


10  UNIVERSITY  OF   CALIFORNIA EXPERIMENT  STATION 

Other  countries  with  far  less  at  stake  than  California  have  found 
out  that  it  pays  to  have  the  government  plan  rural  development,  and 
to  help  worthy  landless  people  to  become  farm  owners.  Our  study  of 
land  settlement  as  a  public  problem  should  include  the  methods  and 
experience  of  other  countries.  Much  can  be  learned  from  a  study 
of  the  colonization  associations  of  Germany,  which  secured  such  won- 
derful results  between  1906  and  1914.  We  want  to  know  how  the 
land  mortgage  banks  help  Danish  farm  buyers  to  borrow  money  up 
to  90  per  cent  of  the  cost  of  the  farms.  We  want  to  know  what  Aus- 
tralia has  achieved  by  lending  postal  savings  to  settlers  at  4y2  per 
cent.  Such  information  will  certainly  help  immensely  in  developing 
our  policy  in  the  United  States.  It  may  lead  to  the  adoption  of  these 
policies  in  the  United  States. 

PRINCIPLES    WHICH    SHOULD    GOVERN    CREDIT    TO    SETTLERS 

The  farm  buyer  must  have  capital  enough  of  his  own  to  give  him 
a  stake  in  the  enterprise  and  to  insure  the  state  against  loss. 

He  must  have  character,  industry,  and  thrift.  If  he  has  no  experi- 
ence, he  must  have  more  capital.  To  permit  an  unfit  man  to  spend 
his  money  and  time  trying  to  pay  for  a  farm  is  not  kindness.  The 
chances  of  failure  are  too  great.  The  authority  which  deals  with 
settlers  must  have  the  power  to  exclude  all  who  do  not  seem  qualified 
to  succeed. 

Settlements  should  have  land  enough  to  provide  homes  for  not  less 
than  100  families.  The  overhead  expenses  are  too  large  if  the  number 
is  smaller.  It  takes  numbers  to  make  cooperation  a  working  success. 
Group  settlements  can  create  communitiy  reputations  for  products 
and  thus  be  able  to  secure  special  markets  and  in  a  measure  fix  prices. 
Moreover,  the  people  of  this  country  are  dissatisfied  and  discouraged 
by  a  rural  life  in  which  there  is  no  community  spirit.  They  want  to 
live  where  the  people  work  together,  plan  together,  and  play  together. 
Community  development  will  draw  here  the  very  best  of  the  rural- 
minded  people  of  moderate  means  from  the  eastern  part  of  America. 
It  will  make  rural  California  American  in  the  best  sense. 

STATE    AND    NATIONAL   AGENCIES    MUST    WORK    TOGETHER 

We  must  make  a  larger  use  of  the  Federal  Land  Bank.  I  hope 
we  will  decide  to  follow  Australia's  example  and  use  postal  savings 
as  a  source  of  credit  for  the  farm  buyer.  Germany  spent  $400,000,000 
aiding  land  settlement  between  1906  and  1914.  England  spent  $550,- 
000,000  between  190']  and  1913  in  converting  the  Irish  peasant  into 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    11 

a  land  owner  and  good  farmer.  California  has  larger  opportunities 
and  more  to  gain  from  closer  settlement  than  either  of  these  countries. 
California  will  gain  as  much  from  an  enlightened  settlement  policy 
as  has  Australia,  where,  in  the  last  18  years,  three  and  one-half  million 
acres  of  land  have  been  bought  by  the  government  from  private 
owners,  subdivided,  and  sold  in  small  farms  to  actual  settlers.  The 
State  of  Victoria,  Australia,  borrowed  $110,000,000  from  the  state 
savings  bank  to  promote  closer  settlement  and  other  rural  development. 
Writing  of  this,  one  of  the  state  officials  says:  "The  feeling  is  that 
there  could  be  no  safer  investment  for  money  lodged  in  the  govern- 
ment bmik.  The  savings  bank  either  advances  this  money  direct  or 
purchases  debentures  and  there  is  no  doubt  but  that  this  method  has 
been  very  satisfactory  from  all  points  of  view." 

WHAT    SETTLEMENT    PLANS    SHOULD    INCLUDE 

Future  rural  development  must  be  planned.  The  settler  must 
not  be  left  to  shift  for  himself  after  he  has  parted  with  .his  money 
as  a  payment  on  land.  His  success  must  be  a  continuing  obligation 
of  some  one ;  either  the  state  or  the  private  colonizer. 

One  of  the  best  statements  of  the  principles  which  should  govern 
colonization  is  given  in  the  1919  report  of  the  Royal  Colonial  Institute 
of  Great  Britain : 

1.  That  settlers  shall  be  placed  on  the  land  in  groups  or  communities  rather 
than  as  isolated  units;*  and  experience  has  shown  that  in  general  terms  the  group 
should  consist  of  at  least  200  holders  if  the  full  economic  advantages  are  to  be 
secured. 

2.  That  the  settlers  should  own  their  farms  rather  than  hold  them  as  tenants. 

3.  That  access  to  capital  should  be  provided. 

4.  That  complete  arrangements  should  be  made  to  provide  the  settler  with 
expert  guidance  from  the  outset. 

5.  That  co-operation  should  be  encouraged. 

6.  That  a  system  of  organized  transport  is  essential  to  the  success  of  the  com- 
munity. 

7.  That  the  community  spirit  should  be  encouraged  so  that  the  settlers  can 
build  up  for  themselves  a  strong  community  life. 

THE    ADVANTAGES    OF    SMALL    FARMS 

Nearly  half  the  farms  in  Denmark  have  less  than  six  acres.  A 
majority  of  these  are  homes  of  farm  laborers  and  factory  workers. 
They  do  not  have  large  incomes  but  they  have  a  happy,  comfortable 
life.     There  is  a  great  field  in  California  for  this  kind  of  settlement. 


Note:  The  group  system  in  no  way  implies  communism. 


12  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

Thousands  of  families  in  the  east,  who  have  a  small  income,  could  get 
more  out  of  life  on  a  two-acre  farm  in  California  and  live  more 
securely  and  healthfully  on  their  income  than  they  can  in  an  eastern 
city. 

In  cooperation  with  the  Farm  Bureau  of  Madera  County,  we  have 
been  gathering  information  about  the  return  the  resident  and  the 
non-resident  owner  gets  from  the  large  grain  farm  and  the  return  the 
settler  gets  from  his  small  irrigated  home.  We  have  a  few  examples 
of  a  larger  income  from  ten  acres  of  vines  or  alfalfa  than  from  the 
rental  of  1000  acres  of  tenant-grown  grain.  The  average  return  from 
one  acre  of  irrigated  land  was  equal  to  the  average  return  from  35 
acres  of  grain  land.  The  owner  of  the  irrigated  farm  lives  better  and 
has  better  social  advantages. 

Life  on  grain  farms  is  lonely.  Families  are  too  widely  separated. 
Where  there  is  a  family  on  every  20  or  40  acres  there  is  human  inter- 
est, social  contact,  and  fun.  The  children  get  together  to  play.  The 
parents  work  together. 

In  the  Madera  district  alone,  much  money  can  be  saved  to  settlers 
by  giving  them  expert  advice  in  planning  and  building  their  houses, 
in  buying  stock,  and  in  laying  out  and  planting  their  fields.  Plans 
ought  to  go  farther.  There .  ought  to  be  community  centers,  oppor- 
tunities for  recreation.  There  ought  to  be  tennis  courts,  baseball 
grounds,  and  swimming  pools.  The  field  for  rural  planning  is  broad 
and  inviting,  and  the  results  of  this  planning,  if  carried  out,  will 
change  and  improve  rural  civilization  in  California  for  the  next 
thousand  years. 

The  best  engineering  talent  is  employed  to  design  irrigation  struc- 
tures. Why  not  use  educated  taste  and  experience  in  planning  houses 
and  helping  to  locate  the  orchards,  gardens,  and  fields  ? 

The  whole  world  goes  to  England  to  study  and  admire  the  Garden 
City  at  Letchworth.  We  can,  if  we  only  will,  create  something  still 
finer  and  larger  here  because  nature  gives  us  so  much  more  to  work 
with.  More  than  that,  we  can  achieve  fine  things  at  less  than  the  cost 
of  the  mediocre  .  results  which  are  obtained  by  leaving  settlers  to 
straggle  in  and  struggle  alone. 

Settlers  will  bring  a  large  part  of  this  money.  The  more  we  do 
to  help  them  make  this  a  district  which  shows  comfort  and  beauty  in 
its  homes,  the  better  will  be  the  settlers  who  seek  entrance,  and  the 
more  money  they  will  bring.  If  each  settler  has  a  capital  of  $5000, 
they  would  bring  to  the  Madera  district  alone  a  total  of  $50,000,000. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    13 


Fig.    1. — Headquarters   of  a   grain   ranch  within  the   boundaries   of   the   Madera 
irrigation  district.     Note  the  absence  of  verdure  or  vegetation. 


Fig.  2. — Home  on  a  twenty-acre  irrigated  farm  in  the  Madera  district. 


14  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

WHAT    CREDIT    FOR    LAND    SETTLEMENT    WILL    ACCOMPLISH 

Forty  years  ago  agriculture  in  Denmark  was  demoralized.  The 
farm  laborer  and  the  farm  tenant  were  moving  to  the  cities  or  to  other 
countries.  Denmark  as  a  country  was  threatened  with  national  bank- 
ruptcy because  of  the  collapse  of  agriculture.  Today  rural  Denmark 
is  one  of  the  most  contented  and  prosperous  agricultural  districts 
in  the  world  and  it  is  to  a  large  extent  due  to  a  credit  policy  which 
enabled  the  Danish  farm  laborer  and  tenant  farmer  to  own  his  home 
and  the  land  he  cultivates. 

To  do  this,  the  government  bought  and  subdivided  land,  and  sold 
it  to  settlers  on  75  to  90  years'  time  on  the  payment  of  10  per  cent  of 
the  cost  of  the  completed  farm,  with  interest  from  3  to  4  per  cent.  A 
similar  transformation  has  taken  place  in  Ireland  by  the  purchase 
of  the  land  and  its  sale  to  its  former  cultivators  on  68  years'  time 
with  interest  at  3  per  cent. 

In  Australia  the  settler  has  from  31  to  36  years  to  pay  for  a  farm. 
He  pays  3  per  cent  of  the  cost  in  cash  and  must  have  a  capital  of 
$1500.  Under  the  California  plan,  the  settler  is  given  36y2  years. 
He  needs  no  capital  in  the  purchase  of  a  farm  laborer's  allotment,  but 
must  have  not  less  than  $2500  capital  to  buy  a  farm  of  20  acres  or 
more,  and  the  interest  payment  is  5  per  cent. 

There  has  been  some  criticism  of  the  Land  Settlement  Board 
because  it  would  not  take  intending  settlers  without  capital,  or  less 
capital  than  $2500.  Unless  the  Board  is  prepared  to  lend  settlers 
money  to  complete  the  improvement  of  their  farms,  they  cannot  make 
a  successful  start  with  $2500.*  Studies  made  by  the  Experiment 
Station  of  the  University  of  Wisconsin  showed  that  it  takes  from 
$4000  to  $6000  to  equip  a  40-acre  dairy  farm  in  the  cutover  lands  of 
that  section.  A  barn,  house,  and  other  small  buildings  cost  $3000; 
fences  $300;  horses  and  harness  $600;  cows,  pigs,  and  chickens  $1200; 
implements  and  machinery  from  $500  to  $1000. 

Later  on  in  this  discussion  there  will  be  given  a  summary  of  the 
cost  of  developing  20  farms  at  Durham  which  shows  that  outside  of 
the  cost  of  preparing  the  land  for  irrigation,  these  settlers  have  spent 
an  average  of  $7437  in  the  improvement  and  equipment  of  each  farm. 

THE   AVERAGE    CAPITAL   OF   LAND    SEEKERS 

The  records  of  the  Land  Settlement  Board  and  studies  at  Wiscon- 
sin show  that  there  are  comparatively  few  farm  buyers  with  money 
enough  to  improve  and  equip  a  farm.    Nearly  all  must  borrow  money, 


See  article  by  E.  L.  Adams,  p.  39. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    15 


Fig1.  3. — Community  Center  at  the  Durham  State  Land  Settlement. 


Fig.  4. — Community  Hall  on  the  Delhi  State  Land   Settlement. 


16  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

even  if  no  payment  on  the  land  is  required.  Homeseekers  with  plenty 
of  money  usually  buy  improved  farms.  They  do  not  want  to  do 
pioneer  work  on  a  40-aere  unit.  A  majority  of  those  who  apply  for 
farms  under  the  Land  Settlement  Act  have  less  than  $2000,  but  the 
number  with  from  $3000  to  $5000  is  large.  A  smaller  number  have 
from  $5000  to  $10,000,  and  not  one  in  a  thousand  has  more  than 
$10,000.  This  agrees  with  the  experience  of  Wisconsin.  Under  the 
credit  system  there,  a  settler  can  "get  by"  who  has  $2000  capital, 
but  the  majority  of  those  who  apply  have  less  than  $500. 

What  we  must  work  for  is  a  colonization  scheme  that  will  take 
care  of  the  family  otherwise  qualified  who  has  from  $3000  to  $5000. 

THE  FEDERAL  LAND   BANK 

When  the  Federal  Farm  Loan  Act  was  passed,  it  was  believed 
it  would  be  used  by  the  tenant  farmer  to  help  him  in  becoming  a 
land  owner.  Experience  shows  that  its  provisions  are  too  conserva- 
tive to  be  of  much  aid  to  the  landless  farmer  of  limited  capital.  The 
third  annual  report  of  the  Federal  Farm  Loan  Board  showed  that 
one  loan  in  12  was  used  for  buying  farm  land.  Later  investigations 
by  the  U.  S.  Department  of  Agriculture  showed  that  two-thirds  of  the 
tenant  borrowers  were  landless.  Nearly  60  per  cent  of  all  land  bank 
loans  are  made  to  pay  off  mortgages ;  9  per  cent  to  pay  other  debts. 

Investigation  shows  that  the  Federal  Land  Bank  has  not  always 
loaned  50  per  cent  of  the  value  of  the  land.  The  average  is  about 
43  per  cent.  The  land  banks  are  not  to  be  criticized  for  this  care. 
We  want  a  larger  loan,  but  we  do  not  want  the  bank  to  lose  money  or 
worry  over  payments  being  made  on  time.  We  must  work  out  a  plan 
to  make  larger  loans  secure.  It  can  be  done  because  it  is  done  in 
Australia  and  Denmark.  It  cannot  be  done  where  each  settler  is  left 
to  shift  for  himself. 

THE   WISCONSIN    PLAN 

Wisconsin  has  tried  to  meet  this  credit  need  through  a  Rural 
Credit  and  Land  Mortgage  Act,  under  which  colonization  companies 
can  issue  bonds  secured  by  the  land  to  be  settled.  Before  these  bonds 
can  be  sold  the  State  Commissioner  of  Agriculture  has  to  certify  (1) 
that  the  land  is  fit  for  agricultural  purposes;  (2)  that  it  is  available 
to  settlers,  that  is,  near  enough  to  marketing  points,  with  good  roads, 
etc.;  (3)  that  the  plan  of  land  settlement  is  in  the  interest  of  the 
settler;  (4)  that  the  payments  are  amortized.  Unless  these  four  con- 
ditions are  fulfilled  and  certified  to  by  the  State  Commissioner  of 
Agriculture  the  securities  cannot  be  accepted  under  the  Land  Mort- 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    17 

gage  Association  Act.  By  reason  of  state  supervision  there  is  a  saving 
of  interest  charges  of  one-half  or  three-quarters  of  one  per  cent.  If 
the  bonds  were  issued  directly  by  the  state  instead  of  being  merely 
supervised  by  the  state,  an  additional  one  per  cent  interest  would  be 
saved.  :  jijj    I 

One  Wisconsin  colonization  company  has  sold  and  settled  about 
130,000  acres  financed  in  this  way.  This  company  does  nearly  every- 
thing that  is  done  under  the  California  Land  Settlement  Act.  It  buys 
the  land  for  from  $6  to  $8  an  acre  and  sells  it  for  from  $25  to  $35  an 
acre.  The  difference  between  the  buying  and  selling  price  is  divided 
as  follows :  ten  dollars  is  charged  for  overhead,  five  dollars  for  services, 
that  is,  for  building  roads,  giving  prizes  for  agricultural  contests, 
paying  the  salary  of  an  agricultural  superintendent  or  advisor,  and 
furnishing  seed.  The  remainder  is  set  aside  for  profit.  In  other 
words,  the  company  aims  to  help  the  settler  get  started  through  advice 
and  supervision  at  a  cost  of  $15  an  acre. 

After  the  first  payment,  which  varies  with  the  size  of  the  farm 
bought,  no  payments  of  either  principal  or  interest  are  required  for 
three  years.  During  the  three-year  development  period,  the  company 
often  lends  the  settler  from  $300  to  $500.  At  the  end  of  the  three-year 
period,  the  settler  begins  to  pay  6V2  interest  on  the  purchase  price 
of  the  land  and  1  per  cent  additional  for  amortization,  making  7% 
per  cent  in  all.  As  soon  as  the  settler  has  his  land  cleared  and  im- 
proved, its  value  increases  so  that  he  can  sell  a  mortgage  security 
under  the  State  Mortgage  Act  before  referred  to  and  pay  off  the 
colonization  company.     Wisconsin  gives  service  as  well  as  credit. 

The  Wisconsin  companies  build  houses,  buy  stock,  plan  towns, 
create  community  centers,  and  give  prizes  for  the  best  work  in  clear- 
ing and  the  best  crops  grown.  The  manager  of  the  largest  of  these 
schemes  has  suggested  to  large  owners  that  the  organized  colonization 
companies  take  preferred  stock  for  the  cost  of  the  land,  with  a  50 
per  cent  bonus  of  common  stock,  so  that  if  a  profit  was  made  in  the 
colonization,  they  might  receive  one-half  of  the  extra  profits.  The 
colonization  company  handling  the  land  would  receive  the  other  half. 

WOULD    THE    WISCONSIN     PLAN    SUCCEED     IN    CALIFORNIA 

I  do  not  believe  this  plan  would  operate  successfully  in  California. 
The  price  of  land  is  too  high,  the  cost  of  improving  a  farm  is  too 
great,  the  amount  of  money  involved  is  too  large,  and  the  rate  of 
interest  is  too  high.  The  bonds  sold  under  the  Wisconsin  Land  Mort- 
gage Act  now  have  to  pay  7  per  cent  interest.  We  must  work  out  a 
plan  where  the  rate  of  interest  does  not  exceed  5  per  cent. 


18  UNIVERSITY  OF   CALIFORNIA EXPERIMENT  STATION 


THE    CALIFORNIA    STATE    LAND    SETTLEMENT   ACT 

I  take  it  that  all  are  familiar  with  the  provisions  of  the  California 
Land  Settlement  Act.  Under  it,  the  state  buys  land,  subdivides  it, 
determines  the  relative  value  of  the  farms,  and  endeavors  to  fix  the 
prices  of  these  farms  so  as  to  make  all  of  them  equally  attractive.  The 
land  is  sold  on  36y2  years'  time.  The  interest  is  5  per  cent,  the  yearly 
payments  on  principal  are  1  per  cent,  so  that  the  settler  by  paying 
6  per  cent  a  year  owns  his  farm  free  of  debt  in  36V2  years.  The  state 
places  in  each  community  a  practical  advisor.  It  can  loan  to  approved 
settlers  up  to  $3000  to  help  them  out  with  their  development.  The 
making  of  these  loans  is,  however,  entirely  optional. 

In  fixing  the  price  of  land,  enough  is  added  to  the  purchase  price 
to  pay  for  irrigation  works  and  for  other  improvements  that  the  state 
agrees  to  make,  to  pay  the  salary  of  the  superintendent,  to  pay  all 
expenses  of  keeping  books,  and  other  overhead  costs.  The  amount  of 
this  overhead  is  not  greatly  above  that  charged  in  Wisconsin,  but 
the  amount  cannot  be  fixed  with  the  same  certainty  because  these 
prices  are  usually  fixed  before  irrigation  development  is  completed 
and  because  there  is  included  in  the  California  plan  provision  for 
loans,  and  every  loan  adds  to  the  administration  expense. 

HOMES    FOR    FARM    LABORERS 

The  homes  for  farm  laborers  provided  for  in  the  California  Act 
are  something  new  in  American  rural  planning.  But  they  are  here 
to  stay.  We  have  only  just  begun  to  dimly  realize  their  value.  The 
number  of  farm  laborers  employed  in  American  agriculture  is  as 
great  as  the  number  of  farm  owners.  If  democracy  means  anything, 
the  family  of  the  farm  laborer  ought  to  be  able  to  live  under  as  good 
conditions  as  the  artisan  in  the  city  and  he  ought  to  have  a  place 
in  rural  society  that  gives  to  his  family  a  feeling  of  independence, 
comfort,  and  self-respect.  That  situation  does  not  result  when  the 
farm  laborers  live  in  bunk  houses  and  their  families  are  separated 
from  them. 

The  California  Land  Settlement  Act  enables  the  farm  laborer,  or 
any  person  who  lacks  capital  but  is  willing  to  work  for  wages,  to  buy 
anywhere  from  half  an  acre  to  five  acres  of  land.  He  is  helped  in  the 
same  way  as  the  farm  buyer  in  making  improvements  and  there  is 
greater  competition  for  farm  laborers'  allotments  than  there  is  for 
farms. 


Circular  247]   colonization  and  rural  development  in  California  19 

The  28  farm  laborers '  homes  in  the  Durham  State  Land  Settlement 
are  the  most  attractive  part  of  that  settlement.  One  of  these  settlers 
has  already  made  and  saved  money  enough  to  buy  a  10-acre  place  and 
has  let  his  2-acre  allotment  go  to  another  laborer.  One  has  saved 
enough  money  to  buy  15  acres  when  the  land  now  under  lease  at 
Durham  is  put  on  the  market,  but  he  does  not  intend  to  leave  his 
2-acre  farm  allotment.  That  is  to  be  his  home.  In  other  words,  the 
influence  of  the  farm  laborer's  home  is  to  keep  people  on  the  land. 
The  children  of  the  farm  laborer  of  today  will  be  the  farm  owners  of 
the  future. 

THE   SPHERES    OF   PUBLIC   AND    PRIVATE    ENTERPRISE    IN 
LAND    SETTLEMENT 

This  brings  up  a  question  as  to  whether  planned  rural  develop- 
ment can  be  carried  out  by  private  enterprise  or  must  continue  to  be 
regarded  as  a  public  matter.  The  answer  will  depend  in  some  meas- 
ure on  the  kind  of  settlement  that  is  being  considered.  The  work  of 
the  realtor  who  acts  as  an  agent  in  buying  and  selling  farms  or  small 
subdivisions  of  land,  does  not  have  a  public  character.  It  clearly 
falls  within  the  domain  of  private  enterprise  and  this  alone  is  a  broad 
field  of  action. 

But  the  colonization  of  areas  large  enough  to  make  more  than  100 
farms,  large  enough  to  create  organized  communities,  large  enough  to 
pay  the  salary  of  a  superintendent  and  the  expenses  of  administra- 
tion, present  questions  difficult  of  solution  by  private  enterprise. 
They  can,  I  believe,  be  best  carried  out  as  public  enterprises.  First 
of  all,  because  private  enterprise  works  for  profit.  There  is  little  pros- 
pect at  present  that  colonization  of  large  areas  can  be  made  to  pay 
a  satisfactory  return  as  a  business  enterprise.  Land  costs,  the  need 
for  generous  credit,  the  need  for  expert  advice  and  direction  are 
against  the  business  success  of  colonization. 

Some  of  the  foremost  advocates  of  private  enterprise  recognize 
this  and  say  that  it  is  the  duty  of  the  state  to  do  the  following  things 
for  private  colonies: 

1.  The  state  should  make  soil  maps  and  reports  of  the  land  to 

be  colonized. 

2.  The  state  should  make  demonstrations  of  the  best  methods  of 

clearing  land  or  of  preparing  it  for  cultivation. 

3.  The  state  should  show  the  settler  what  crops  to  grow  and  how 

to  grow  them. 

4.  The  state  should  build  roads  through  the  settlements. 

5.  The  state  should  help  create  a  social  and  recreational  life. 


20  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

If  the  state  does  these  things,  colonization  becomes  a  public  matter, 
even  if  the  land  is  sold  by  individuals  or  corporations.  Under  this 
plan  the  state  would  do  things  that  brought  no  money  return  while 
private  enterprise  would  look  after  the  business  end.  California  now 
has  a  better  arrangement  than  this.  The  cost  of  advice  and  direction 
is  paid  by  the  settlers.  The  element  of  profit  is  eliminated.  State 
settlements  will  draw  more  people  than  private  enterprise.  The 
expense  of  securing  the  right  type  of  settler  is  greatly  reduced. 

We  made  settlement  of  the  public  lands  a  government  enterprise. 
All  recent  great  achievements  in  land  settlement  and  planned  rural 
development  in  other  countries  have  been  government  enterprises. 
Only  the  government  has  the  resources,  the  continuity  of  action 
needed  to  people  and  develop  the  great  areas  of  land  which  await 
development  in  California.  The  state  can  do  this  work  at  less  expense 
than  can  private  enterprise.  Benefits  come  to  the  state  from  rural 
development  which  private  enterprise  cannot  share.  Among  these  are 
increase  in  revenue  from  taxes,  increase  in  business,  and  increase  in 
desirable  people.  All  these  things  benefit  the  state  directly  and  are 
of  sufficient  importance  to  justify  insuring  a  large  expense  to  bring 
them  about. 

LAND    SETTLEMENT   SHOULD    BE    KEPT    FREE   FROM    POLITICAL 
INTERFERENCE 

The  Land  Settlement  Board  of  California  has  been  efficient  because 
it  has  functioned  like  a  corporation.  It  had  on  its  board  of  directors 
four  men  of  exceptional  business  ability,  Mortimer  Fleischhacker, 
E.  S.  Wangenheim,  Frank  P.  Flint,  and  Prescott  F.  Cogswell.  These 
men  are  equipped  by  experience  and  character  to  manage  any  corpo- 
ration, yet  they  gave  their  services  to  the  state. 

Land  Settlement  ought  to  continue  under  this  board  or  one  of  like 
character.  It  might  be  enlarged  to  include  other  men  of  business 
ability.  It  might  be  well  to  include  an  irrigation  engineer,  one  or 
two  men  of  agricultural  knowledge  and  experience,  and  one  man 
who  would  have  the  viewpoint  of  the  farm  laborer.  Operating  in  a 
much  larger  field,  the  administrative  organization  would  have  to  be 
increased.  That  would  be  the  principal  change  from  the  board  as  it 
has  functioned.  There  is  no  reason  why  such  a  board  cannot  be  kept 
free  from  politics. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    21 

IMPORTANCE     OF     LONG-TIME     PAYMENTS    AND*   LOW     INTEREST     RATES     IN 
FUTURE    LAND    SETTLEMENT 

I  believe  the  time  is  coming  when  every  American  state  will  pass 
laws  to  promote  farm  ownership  and  check  the  increase  in  tenantry. 
To  do  that  the  length  of  time  to  pay  for  a  farm  and  the  rate  of  interest 
must  be  made  such  as  will  enable  the  payments  to  be  earned  out  of  the 
soil. 

"How  is  the  settler  to  pay  for  a  farm  when  he  has  to  sell  some 
of  his  crops  for  less  than  it  costs  to  raise  them?"  asks  E.  S.  Benson, 
Industrial  Manager  of  the  Northern  Pacific  Railroad.  Mr.  Benson 
is  one  of  the  most  able  and  experienced  leaders  in  the  development 
of  the  northwestern  part  of  this  country.  His  question  is  one  we  must 
face  and  solve  before  we  can  honestly  advise  men  to  go  in  debt  for 
farms. 

European  countries  have  come  to  the  conclusion  that  in  order  to 
pay  for  a  farm  a  settler  must  be  given  from  40  to  90  years'  time  and 
that  the  interest  rate  must  be  somewhere  between  3  and  5  per  cent. 
Comprehensive  studies  made  by  the  U.  S.  Department  of  Agriculture 
and  described  in  an  article  entitled,  "Do  Farms  Pay  For  Them- 
selves?" was  published  in  the  Journal  of  Farm  Economics,  Volume 
II,  No.  4,  October,  1920.  The  author  of  this  article,  Dr.  Geo.  Stewart 
of  the  Utah  Experiment  Station,  summarized  the  farm  income  and 
capital  of  5700  farms.  These  were  divided  into  26  different  groups 
located  in  22  states  extending  from  New  England  to  Utah.  He  took 
the  whole  income  from  the  farm,  deducting  nothing  for  living  expenses 
of  the  family,  and  then  determined  whether  it  was  sufficient  to  pay 
for  a  farm  in  10,  20,  or  30  years  in  amortized  payments  with  interest 
at  5,  6,  8,  and  10  per  cent.  The  results  of  these  studies  show  that 
farm  buying  where  the  interest  rate  was  above  5  per  cent  was  a  failure 
and  the  income  of  only  a  few  farms  was  sufficient  to  pay  for  the 
farms  in  10  years  with  the  interest  rate  at  5  per  cent.  Summed  up, 
farm  buying  was  a  safe  undertaking  only  when  the  time  was  at  least 
30  years  and  the  interest  rate  at  least  as  low  as  5  per  cent. 

When  the  interest  rate  was  raised  to  6  per  cent,  only  one  group 
of  farms  out  of  the  26  produced  crops  of  sufficient  value  to  meet  the 
payments  and  leave  any  surplus  for  the  support  of  the  family,  and  the 
surplus  to  support  the  family  of  this  single  group  only  averaged  $6  a 
year  to  the  farm,  which  is  not  a  living  income. 

At  8  per  cent  farm  buying  was  a  failure.  Not  one  group  out  of 
the  26  had  a  surplus  left  for  family  use.  On  the  contrary,  there  were 
yearly  deficits  in  the  different  groups  ranging  from  $67  in  New  York 
to  $4438  in  West  Central  Illinois. 


22  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

As  a  result  of  these  studies  Dr.  Stewart  reached  the  conclusion 
that  "average  farms  are  not  earning  large  enough  total  incomes  to 
buy  the  farms  in  twenty  years  at  normal  interest  rates.  The  farms 
of  a  few  regions  can  do  so  in  thirty  years  with  a  small  cash  balance 
left  for  family  expenses.  Living  would  even  then  have  to  be  frugal, 
to  say  nothing  of  amusements  and  social  life.  Education  of  the  boys 
and  girls  in  another  town,  even  one  at  a  time,  is  almost  out  of  the 
question.  In  the  great  agricultural  states  of  the  mid-continental 
region  not  a  single  area  as  a  whole  can  pay  for  its  farms  and  even 
have  enough  money  for  necessities,  to  say  nothing  of  education,  pleas- 
ure or  charity.  Other  areas,  except  in  the  North  Atlantic  region, 
are  but  little  better  off.  The  farms  seem  over-capitalized.  The  dice 
are  loaded  against  the  untrained  man  with  small  capital  and  moderate 
ability,  who  wishes  to  become  a  farm  owner.  Is  it  surprising  that 
tenancy  continues  to  increase?" 

During  the  last  year  the  Division  of  Rural  Institutions  has  made 
a  study  of  many  individual  farms  and  it  has  the  records  of  the  settlers 
in  the  state  settlements  at  Durham  and  Delhi.  These  records  show 
what  it  has  cost  to  improve  and  equip  farms  and  what  has  been  the 
gross  income  from  the  beginning. 

At  Durham  where  the  land  has  now  been  settled  three  years,  con- 
ditions have  become  stable  enough  to  show  fairly  well  what  is  the 
earning  power  of  a  well-managed  farm  under  present  disheartening 
price  conditians.  Recently  R.  V.  Wright,  Farm  Management  Special- 
ist in  Agricultural  Extension  of  the  University,  went  over  the  books 
of  20  farmers  at  Durham.  He  has  made  a  tabulation  of  their  financial 
status  which  is  given  below.  His  records  are  worthy  of  study  by  every 
colonizer  in  California  because  there  is  nothing  theoretical  about 
them.  They  are  actual  results  obtained  under  more  than  ordinarily 
favorable  conditions. 

Of  course,  it  should  be  understood  that  Durham  is  still  in  the 
development  period ;  that  the  orchards  are  not  yet  in  bearing,  and 
that,  because  of  this,  the  incomes  of  these  farms  will  continue  to 
increase  for  the  next  five  years;  but  the  development  at  Durham  is 
far  ahead  of  that  of  the  average  settlement  of  its  age  and  the  incomes 
are  proportionately  larger. 


*****  247]    COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    23 


24 


UNIVERSITY  OF   CALIFORNIA EXPERIMENT  STATION 


Farm  business  summary  for  20  farms,  Durham  State  Land  Settle- 
ment Colony,  fiscal  year  ending  October  1,  1921,  by  R.  V.  Wright:* 

TABLE  1 

Farm  Business  Summary 
Farm  Allottments 


Size 

of 

Farm 

Used 

for 
Crops 

Acres 
Irri- 
gated 

Alfalfa 
Yield 
per  A 

Value 

Crops 

Fed 

Income 

Farm 
No. 

Crops 
Sold 

Live- 
stock 

Total 
Income 

1 

2 

56 

265 
30 
34 
47 
34 
48 
37 
33 
48 
23 
60 
37 
80 
38 
30 
30 
40 
37 
24 

42 

80 
18 
29 
43 
28 
19 
38 
24 
37 
19 
40 
26 
27 
19 
16 
25 
19 
29 
18 

34 

40 
18 
14 
27 
34 
16 
33 
24 
37 
19 
40 
26 
27 
19 
16 
25 
38 
34 
18 

5 
4 

6 
4 
4 

4^ 

4 

6 

8 

4 

4 

$1080 

1150 
610 
480 
720 

1330 
430 

1075 
340 
814 
590 
670 
350 
420 
840 
245 
50 
290 

1335 
240 

$1202 

$2026 
2860 
1480 

$3228 
3050 

3 

4 

200 
36 
400 
75 
750 
620 
270 

2150 

86 

5 
6 

7 
8 
9 

200 
2650 

760 
3260 

688 
3380 
1516 
4204 

250 

10 

1860 
1980 
2025 

2080 

11 

2400 

12 

510 
242 

140 

18 

560 

560 

2875 

13 

4 

2 
6 
6 
4 

292 

14 
15 
16 

680 

1280 

1595 

3349 

650 

17 

18 

120 
1860 
2486 
1720 

621 

2499 

19 

4 

3200 

20 

2490 

Ave. 

51 

29 

27 

4.7 

$  652 

$  242 

$1362 

$2030 

Farm  Management  Specialist,  Agricultural  Extension  Division. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    25 


TABLE  2 


Fixed  Capital 

Value 
Operating  Capital 

Farm 

Farm 
Value 

Buildings 
(except 
house) 

Dwelling 
House 

No. 

Equipment 

Livestock 

Horses 

Supplies 

1 

$17000 

$1845 

$2300 

$1148 

$1720 

$  300 

$1310 

2 

37710 

2925 

4500 

3890 

4860 

150 

1300 

3 

11560 

1456 

2300 

1182 

679 

300 

706 

4 

13065 

1675 

3000 

1878 

574 

555 

1400 

5 

13485 

850 

1250 

725 

645 

30 

300 

6 

13431 

2704 

400 

586 

2385 

350 

900 

7 

12734 

1400 

350 

414 

1130 

100 

857 

8 

12690 
12851 

2400 
1200 

451 
1655 

2937 
425 

310 
400 

940 

9 

1800 

530 

10 

12300 

2500 

1800 

500 

2010 

450 

600 

11 

9172 

996 

1620 

654 

1601 

400 

340 

12 

20300 

2915 

100 

1485 

2945 

500 

1470 

13 

11700 

250 

1200 

84 

394 

80 

190 

14 

32343 

1450 

7750 

2052 

1510 

550 

1425 

15 

10367 

980 

2750 

1382 

1510 

250 

865 

16 

10999 

400 

275 

1655 

362 

150 

1345 

17 

11212 

795 

450 

450 

430 

75 

130 

18 

13950 

1480 

1710 

480 

2140 

200 

800 

19 

14000 

2400 

450 

1162 

2265 

400 

1625 

20 

6613 

340 

4100 

1350 

1859 

2070 

Ave. 

$14847 

$1548 

$1897 

$1159 

$1621 

$  257 

$  955 

26 


UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 


TABLE  3 


Inventory  Value 

Increase 

Decrease 

Total 
Amount 
Credits 

Total 
Amount 
Expense 

Farm 
No. 

Beginning 
of  Year 

End 
of  Year 

Net 
Farm 
Income 

1 

$7098 

10790 
4030 
7860 
3600 

10951 
3956 
7038 
5740 
6060 
5310 
7640 
2008 

12860 
6451 
3060 
2000 
6810 
9962 
4883 

$6763 

13125 
4323 
9082 
3800 

11627 
6880 
7480 
6010 
6710 
5576 
9415 
2198 

14487 
7745 
4787 
2330 
8155 

10672 
5168 

$325 

$3228 
5385 
2443 
1208 

888 
4056 
4440 
4646 

520 
2730 
2666 
4650 

482 
3222 
4643 
1777 

951 
3844 
3910 
2775 

$1700 

3257 

1206 

300 

435 

2027 

2335 

3177 

380 

1650 

1829 

2780 

415 

2832 

3455 

890 

580 

2025 

1012 

2460 

$1528 

2 

2335 
293 

1122 
200 
676 

2924 
442 
270 
650 
266 

1775 
190 

1627 

1294 

1127 
330 

1345 
710 
285 

2128 

3 

1237 

4 

908 

5 

453 

6 

2029 

7 

2105 

8 

1469 

9 

140 

10 

1080 

11 

837 

12 

1870 

13 

67 

14 

390 

15 

1188 

16 

887 

17 

371 

18 

1819 

19 

2898 

20 

315 

Ave. 

$6405 

$7316 

$  940 

$325 

$2923 

$1720 

$1181 

Note. — In  determining  the  Total  Income  as  listed  in  Table  1,  the  actual 
income  from  the  sale  of  farm  products,  such  as  hay,  dairy  products,  eggs,  wood, 
etc.,  was  included,  but  not  the  income  from  any  source  outside  of  the  farm  busi- 
ness, such  as  labor.  The  Total  Amount  Credits  as  listed  in  Table  3,  was  determined 
by  adding  the  Total  Income  as  listed  in  Table  1  and  the  increase  in  value  of  the 
inventory  as  listed  in  Table  3.  The  general  increase  in  the  value  of  the  inventory 
is  due  to  increased  value  of  the  dairy  herds,  which  are  as  a  whole  larger  than  at 
the  beginning  of  the  year;  the  new  equipment  added  and  the  general  addition  of 
new  improvements  on  the  colony. 

The  inventory  as  listed  in  Table  3  includes  the  value  of  all  buildings  (except 
the  house),  all  other  permanent  improvements,  the  equipment,  the  livestock  and 
the  supplies  on  hand.  Depreciation  on  improvements,  equipment  and  livestock  was 
taken  into  consideration  in  determining  the  value  of  the  inventory  at  the  close 
of  the  fiscal  year.     The  inventory  does  not  include  value  of  land. 

The  Expenses  as  listed  in  Table  3  include  all  operating  expenses  and  all  capital 
expenditures  for  new  improvements,  new  equipment  and  additional  livestock.  The 
expenses  also  included  taxes  and  interest  payments  on  the  amount  of  principal  still 
due  the  State  Land  Settlement  Board,  but  not  the  payments  on  the  principal 
itself.     No  personal  household  expenses  were  listed. 

The  Net  Farm  Income  does  not  show  the  increased  value  of  the  land,  due  to 
the  development  of  the  individual  farms  and  the  general  development  of  the  com- 
munity. This  may  conservatively  be  estimated  at  $1000  per  farm  for  the  past 
fiscal  year.  Neither  does  it  give  credit  to  the  farm  for  the  value  of  the  family 
living  received  from  the  farm,  which  is  estimated  to  be  on  an  average  of  $600. 

The  above  tabulated  summary  and  statement  of  Mr.  Wright's  con- 
clusions might  be  supplemented  by  the  following: 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    27 

The  average  income  of  these  settlers  of  $1181  is  considerably  more 
than  enough  to  meet  the  amortized  payments  under  the  36 %  year 
plan,  but  if  the  payments  were  not  amortized  and  extended  only  over 
the  usual  period  of  ten  years,  there  would  not  be  a  single  settler  who 
earned  enough  to  meet  his  payments.  Mr.  Wright  also  went  over  the 
accounts  of  four  of  the  farm  laborers,  which  were  intended  to  be 
typical  of  all  the  farm  laborers.  The  results  are  shown  in  the  sum- 
mary given  on  page  28. 

Attention  may  be  called  here  to  the  fact  that  the  average  net 
income  of  the  farm  laborer  was  $1061,  while  the  average  net  income 
of  the  farmer,  with  an  average  investment  of  nearly  $15,000  in  a 
farm,  was  only  $120  more.  This  shows  that  the  farm  laborer  is  rela- 
tively better  off  than  the  farm  owner.  It  also  explains  the  constant 
tendency  toward  smaller  farms,  that  can  be  cultivated  with  the  labor 
of  a  single  family  and  paying  out  money  for  extra  help  eliminated. 
That,  however,  is  not  the  whole  story  of  these  farm  laborers '  allotments 
for,  of  the  $1061  net  income,  nearly  one-third  came  from  the  sale  of 
products  of  their  two-acre  allotments.  The  income  from  these  allot- 
ments is  now  only  a  fraction  of  what  it  will  be  in  a  year  or  two  because 
nearly  all  of  them  have  been  planted  with  fruit  trees  which  are  just 
coming  into  bearing. 

The  income  from  the  land,  the  income  from  labor,  the  small 
expenses  of  the  farm  laborer,  all  show  the  value  of  this  innovation. 
It  does  not  show,  however,  the  social  importance  of  this  change  to 
the  farm  laborer.  When  we  are  planning  the  rural  community  of  the 
future,  it  will  be  a  great  mistake  if  we  do  not  recognize  the  farm 
laborer  and  his  family  as  something  more  than  a  mere  instrument  for 
cultivating  crops.  We  must  consider  him  as  a  citizen.  We  must 
consider  his  family  as  the  potential  farm  owner  of  the  future.  The 
wives  and  children  of  the  farm  laborers  at  Durham  take  part  in  all 
the  games  and  social  activities,  besides  helping  to  furnish  labor  for 
cultivating  the  fields  and  saving  the  fruit  of  the  surrounding  farms  in 
the  period  when  emergency  help  is  required. 

The  demand  for  farm  laborers'  allotments  at  Durham  and  Delhi 
shows  that  the  American  farm  laborer  will  not  desert  the  farm  if 
right  living  conditions  are  made  possible.  It  shows  also  that  the  farm 
laborer  and  his  family  will  do  all  kinds  of  farm  labor  if  he  can  have 
a  home  in  which  comfort,  independence,  and  self-respect  are  made 
possible. 


28 


UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 


TABLE  4 

General  Summary 
Farm  Labor  Allotments 
Showing  the  Investment  and  the  Net  Income 


Size  of 
Lot 

Income 

Expenses 

lot 
Business 

Lot 
No. 

Sale  of 
Products 

Outside 
Labor 

Total 

Net 

Lot 

Income 

1 

2 
3 

4 

2 

2 
2 
2 

$160 

150 
853 
125 

$1323 

1125 

600 

1050 

$1483 
1275 
1453 
1175 

$425 
156 
312 
248 

$1058 

1119 

1141 

927 

Ave. 

2 

$322 

$1024 

$1346 

$285 

$1061 

TABLE  5 


Fixed  Capital 

Operating  Capital 

Lot 
No. 

Lot 
Value 

Buildings 
(except 
house) 

Dwelling 
House 

Equip- 
ment 

Live- 
stock 

Supplies 

Remarks 

1 
2 
3 

4 

$400 
400 
400 
400 

$140 
325 

740 
470 

$1100 
1300 
1500 
2000 

$  50 
100 
237 
735 

$  70 

24 

365 

362 

$  75 

15 

100 

60 

Ditch  tender 
Odd  jobs 
Rented  some  land 
Odd  jobs 

Ave. 

$400 

$418 

$1475 

$280 

$205 

$  62 

Note. — The  Expenses  for  Lot  Business  as  listed  in  Table  4,  include  the  operat- 
ing expenses,  such  as  feed,  taxes,  insurance,  repairs  and  interest  paid  on  the  prin- 
cipal till  due  on  the  land.     No  personal  household  expenses  are  included. 

The  value  of  the  family  living  received  from  the  lot,  in  the  nature  of  vegetables, 
fruit,  livestock  products  and  rent  would  average  about  $450  per  year. 

The  summaries  of  the  above  allotments  are  typical  of  the  situation  on  the  labor 
allotments  at  Durham  State  Colony. 


THE    IMPORTANCE    OF    THE    THREE    MILLION    DOLLAR    BOND    ISSUE 

The  need  for  long-time  credits  and  the  need  for  a  low  interest  rate 
makes  the  vote  on  the  $3,000,000  bond  issue  to  continue  state  land 
settlement  authorized  by  the  last  state  legislature  (1921)  a  matter  of 
importance.  If  this  bond  issue  is  ratified,  it  will  at  once  return  to 
the  state  treasury  the  $1,000,000  advanced  by  the  preceding  legisla- 
ture to  complete  the  state  settlement  at  Delhi  and  will  leave  $2,000,000 
with  which  to  create  new  settlements. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    29 

If  this  fund  of  $2,000,000  should  be  used  as  previous  funds  have 
been,  it  would  serve  to  create  only  a  single  new  settlement.  But  if 
used  to  guarantee  the  prompt  payment  of  principal  and  interest  on 
loans  made  by  the  Federal  Land  Bank  and  deferred  payments  to  land 
owners,  then  it  can  be  made  to  serve  as  a  basis  for  three  or  four  settle- 
ments to  start  with  and  if  the  payments  of  these  settlers  are  made 
promptly,  it  can  be  used  for  a  revolving  fund  for  an  indefinite  future 
development. 

Such  an  arrangement  is  not  experimental  or  new.  It  is  a  common 
European  practice.  It  would  give  a  social  value  to  the  Federal  Farm 
Loan  Act  that  can  be  acquired  in  no  other  way,  and  would  be  another 
step  along  the  road  of  planned  rural  development  which  this  country 
must  travel. 

SETTLERS  UNDERWRITE  STATE  LOANS 

We  have  spoken  of  the  state  funds  being  used  to  underwrite  the 
money  advanced  by  the  Federal  Land  Bank  and  to  the  former  owner 
of  the  land,  but  strictly  speaking  this  is  not  correct.  That  money  is 
underwritten  by  the  settler.  The  settler's  capital  and  the  settler's 
industry  underwrites  all  that  the  state  does.  Under  this  plan,  the 
capital  provided  by  the  state  would  underwrite  nothing  except  prompt 
payment  of  interest.  If  there  were  a  failure  anywhere,  the  first  person 
and  probably  the  only  person  to  feel  it  would  be  the  settler  himself. 
His  capital  and  his  work  is  the  foundation  of  the  whole  financial 
structure,  and  if  the  settlers  are  wisely  selected  and  the  land  suitable 
for  closer  settlement  and  sold  at  a  proper  price,  as  it  almost  certainly 
would  be  under  this  system,  there  is  no  reason  why  twenty  land 
settlements  ought  not  be  as  solvent  and  successful  in  California  as  are 
the  thirty  or  more  similar  settlements  in  the  State  of  Victoria,  Aus- 
tralia, or  the  296  similar  settlements  in  Germany,  which  were  in  exist- 
ence when  the  war  broke  out. 

RURAL-MINDED     PEOPLE     LONG     TO     SECURE     HOMES     IN     CALIFORNIA 

The  next  question  is,  where  should  settlers  be  sought  ?  The  answer 
is,  first  of  all,  at  home.  California  should  provide  for  her  own  people. 
"We  should  create  openings  for  the  young  men  and  women  who  love 
rural  life  and  want  to  start  out  on  a  farm  of  their  own.  The  Austra- 
lian states  give  special  opportunities  to  the  graduates  of  their  agri- 
cultural colleges  and  farm  schools.     We  ought  to  do  the  same  thing. 

We  also  want  to  make  broader  opportunities  for  the  tenant  farmer. 
When  we  go  outside  of  California,  the  people  to  whom  our  lands  will 


30  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

make  the  strongest  appeal  are  the  tenant  farmers  between  our  eastern 
boundary  and  Maine.  In  the  Middle  West  are  thousands  of  people  of 
moderate  circumstances  who  long  to  come  here.  During  the  last 
eight  months  the  State  Land  Settlement  Board  has  had  thousands  of 
inquiries  from  this  type  of  people.  The  Santa  Fe  Railroad  has  5000 
inquiries  on  file  asking  when  the  next  state  land  settlement  in  Cali- 
fornia will  be  thrown  open.  As  I  said  earlier,  rural-minded  persons 
in  every  section  of  the  country  hope  to  end  their  days  in  California. 
We  must  aid  in  the  fulfillment  of  their  hope,  and  not  exploit  it. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    31 


SELECTING  LAND  FOR  SETTLEMENT 
By  CHAS.  F.  SHAW 


In  the  Durham  Land  Settlement  Colony,  two  adjacent  allotments 
were  sold,  one  for  $77  an  acre,  the  other  for  $200  an  acre.  Each  pur- 
chaser is  satisfied  with  his  purchase,  each  convinced  that  he  secured 
his  farm  at  a  fair  price,  yet  there  is  a  difference  of  $123  an  acre  in 
the  cost ! 

The  selling  price  of  the  allotments  varied  from  $250  an  acre  to 
$25  an  acre,  there  being  38  different  acre-values  shown  on  the  adver- 
tised list  of  prices,  yet  no  settler  has  complained  about  either  the  actual 
or  relative  price  of  the  ranch  he  purchased,  that  the  price  was  too  high 
on  the  basis  of  its  producing  value,  or  as  compared  with  other  tracts 
in  the  colony. 

This  remarkable  situation  is  due  to  the  fact  that  the  land  was  sold, 
in  so  far  as  it  was  possible  to  determine  it,  for  the  actual  value  of  the 
soil  making  up  each  particular  allotment  or  ranch.  The  valuation 
of  each  allotment  was  derived  from  a  careful,  scientific  study  of  the 
soil,  together  with  the  use  of  a  map  showing  the  location  of  each  kind 
or  variation  of  soil.  Each  soil  type  or  phase  was  studied  by  experts 
who  appraised  its  agricultural  possibilities  and  determined  on  a  fair 
price  per  acre.  The  acreage  of  each  soil  was  multiplied  by  its  acre 
value,  and  the  sum  of  all  these  determinations  showed  the  combined 
or  total  selling  price  for  the  entire  area.  Had  this  figure  been  too 
low  to  cover  the  original  purchase  price  of  the  land  plus  all  the 
expenses  of  subdivision,  including  overhead,  estimated  selling  costs, 
supervision  for  the  period  of  amortizing  payments,  etc.,  it  would  have 
been  necessary  to  have  made  an  increase  in  the  appraised  value  of 
each  soil  type,  but  fortunately,  the  total  amount  was  sufficient,  though 
barely  sufficient,  to  give  the  sum  needed. 

With  a  definite  valuation  for  each  type  of  soil  it  was  relatively 
easy  to  set  a  fair  acre  price  for  each  allotment.  The  area  of  each  kind 
of  soil  on  the  allotment  was  measured,  multiplied  by  the  acre  valua- 
tion, and  the  amounts  thus  obtained  added,  and  divided  by  the  number 
of  acres  in  the  allotment.  The  acre  price  of  each  allotment,  as  thus 
determined,  does  not  represent  the  value  of  any  one  kind  of  soil,  but 
the  average  value  of  the  soils  making  up  the  allotment.     The  problem 


32  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

of  final  evaluation  of  each  allotment  was  not  quite  so  simple,  however, 
as  the  more  distant  and  inaccessible  allotments  had  to  have  their 
values  reduced,  and  those  better  located  increased  in  proportion,  an 
endeavor  being  made  to  equalize  through  the  selling  price  the  inequali- 
ties in  location  or  accessibility.  To  reach  these  final  values,  much 
hard  work  was  necessary.  A  conscientious  study  of  each  tract  was 
made  by  two  or  three  men  who  approached  the  problem  from  different 
angles.  The  results  are  so  gratifying  that  they  amply  repay  the 
effort.  Contented  colonists,  well  satisfied  with  their  purchases,  insure 
the  success  of  the  colony. 

The  same  method,  modified  to  suit  different  conditions,  is  being 
used  at  the  Land  Settlement  Colony  at  Delhi,  and  the  results,  we 
hope,  will  be  as  happy  as  those  at  Durham.  The  lands  here  are  being 
evaluated  on  a  comparable  basis,  although  the  variable  topography, 
in  its  effect  on  irrigation,  has  an  important  bearing  on  the  final  value 
of  the  land.  The  kind  of  soil  and  its  productive  capacity  will  deter- 
mine the  size  of  the  farm  allotments,  the  topography,  on  irrigated 
farms,  will  determine  their  shape.  The  broken  lines  in  the  diagram 
(Chart  I)  show  the  selling  price  per  acre  for  the  allotments  at  Dur- 
ham, and  for  those  offered  thus  far  at  Delhi.  The  height  of  the  curve 
above  the  base  line  shows  the  price,  while  the  horizontal  length  of  the 
line  on  any  price  level  shows  the  number  of  farms  at  the  given  price 
per  acre.  The  varied  soil  conditions  at  Durham  are  reflected  in  the 
varying  prices  and  the  few  farms  at  any  one  acre  value,  while  the 
smoother  lines  of  Delhi  price  shows  the  influence  of  the  much  more 
uniform  soil  conditions. 

The  results  described  could  not  have  been  obtained  without  accu- 
rate knowledge  of  the  soils  to  be  sold.  The  need  of  careful  and 
accurate  surveys  of  the  water  supply,  available  reservoir  and  dam 
sites,  canal  locations,  and  other  engineering  features,  has  long  been 
recognized,  but  usually  little  or  no  attention  has  been  paid  to  the  soil 
on  which  the  water  is  to  be  used.  An  accurate  surveying  and  map- 
ping of  the  soils  of  the  proposed  colony  is  as  necessary  as  any  of  the 
other  work  of  subdivision  and  should  be  the  basis,  with  the  topo- 
graphic survejr,  of  the  laying  out  and  evaluating  of  the  allotments. 

This  careful  study  of  the  lands,  and  the  establishment  of  selling 
prices  on  the  basis  of  the  actual  value  of  each  allotment,  is  a  relatively 
new  step.  Yet  it  is  an  old  basic  principle  in  any  merchandising ;  silk 
shirts  are  sold  at  silk  shirt  prices  while  cotton  shirts  are  priced  on 
cotton  shirt  values.  One  price  for  shirts,  be  they  silk  or  cotton,  would 
bankrupt  any  merchant  who  should  attempt  to  sell  on  that  basis.    Yet 


Circular  247]   colonization  and  rural  development  in  California  33 

many  land-selling  operations,  many  subdivisions  and  colonies  have 
been  put  on  that  "one  price"  basis,  or  on  only  a  slight  modification 
based  on  obvious  differences  in  soil  or  location.  The  results  of  such 
a  method  of  valuation  are  an  underpricing  of  the  good  soils,  making 
them  very  attractice  bargains ;  and  an  overpricing  of  the  poor  soils, 
making  them  correspondingly  undesirable.  The  purchasers  of  the 
good  lands  soon  pay  out  and  secure  title,  while  the  purchasers,  if 
there  are  any,  of  the  poor  land  soon  fail  and  move  away.  The  result 
is  that  the  operator  or  the  original  land  owner  has  on  his  hands, 


*<//*&£ f     Of  rA/TAfS     SOID. 


Chart  I. — Graph  showing  selling  price  per  acre  of  farms  at  the  Durham  and 
Delhi  Land  Settlement  Colonies  in  California,  and  the  number  of  farms  sold  at 
each  acre  price. 

unsold  and  unsalable,  most  of  the  poorer  lands  of  the  colony,  some- 
times as  much  as  half  of  the  total  acreage !  Not  only  are  these  unsold, 
and  consequently  their  value  not  returned  to  the  company,  but  the 
taxes  and  assessments  for  their  irrigation  and  reclamation  have  to  be 
paid,  often  on  the  basis  of  the  inflated  valuation  that  had  been  given 
them.  Had  proper  methods  of  evaluating  the  lands  been  followed,  the 
price  of  the  poor  lands  would  have  been  made  sufficiently  low  to  be 
attractive — if  offered  in  considerable  areas  at  low  prices  even  alkali 
land  can  be  successfully  used  as  cattle  range — and  would  have  been 
sold  and  successfully  operated  by  the  purchasers.  The  curse  of  the 
colonizer  is  the  unsold  residue,  the  pieces  that  remain  on  hand  long 
after  the  bulk  of  the  tract  is  sold,  or  the  tracts  that  though  sold,  per- 
haps, again  and  again,  always  come  back  to  the  operator  through  the 
failure  of  the  settler  to  make  good  and  stick.     The  financial  problem 


34  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

may  be  met  by  loading  the  price  of  the  land,  boosting  it  to  a  height 
where  the  sale  of  only  a  part  of  the  whole  will  return  the  cost  with 
profit.  This  may  help  out  the  speculator,  but  it  is  hard  on  the  settler, 
and  insures  a  greater  percentage  of  failures.  The  only  solution  of 
the  problem  is  a  careful  study  of  the  land,  an  accurate  soil  survey, 
and  a  just  valuation  of  each  allotment,  based  on  its  actual  producing 
power. 

The  success  of  this  method  of  determining  the  selling  price  of  land 
in  new  subdivisions  depends  on  the  purchase  of  the  original  tract  at 
a  fair  wholesale  price  and  with  a  full  knowledge  of  its  character  and 
suitability  for  closer  settlement.  Obviously,  it  is  the  poorer  lands  that 
are  offered  for  sale  to  colonizers.  The  owners  of  the  good  lands 
usually  are  content  with  their  income,  or,  knowing  the  productive 
value  of  the  land,  place  a  high  purchase  price  on  their  holdings.  The 
owners  of  the  poor  lands  are  willing  to  sell,  and  at  prices  that  may 
seem  very  attractive.  The  real  estate  operator  is  often  mistaken  in 
the  value  of  the  lands  offered,  and  may  be  "stung"  as  badly  as  he  is 
credited  with  "stinging"  his  settlers! 

When  the  Land  Settlement  Board  advertised  for  lands  for  the 
first  colony  forty-four  tracts  were  tendered,  of  which  only  forty  were 
found  to  be  bona  fide  offers.  These  tracts  varied  in  size  from  less 
than  1000  acres  to  over  12,000  acres  each,  and  totalled  199,089  acres. 
Roughly  classified,  these  tracts  fall  into  the  groups  shown  in  Table  1. 

TABLE  1 

Grouping  of  Tracts  Offered  for  the  First  Colony 

Tracts  Acres 

Good  soil  and  water  supply 6  36,563 

Fair  soil  and  water  supply 6  33,680 

Poor  soil,  shallow  or  hardpan 5  31,169 

Alkali  present  in  quantity 8  34,480 

Dry  rolling  uplands 9  32,962 

Desert,  no  available  water 6  30,315 


40  199,089 

The  soils  fall  rather  evenly  (in  area)  into  the  six  groups,  with 
only  about  18  per  cent  classed  as  highly  desirable,  with  good  soil  and 
water  supply.  Much  of  the  second  group  could  be  successfully  sub- 
divided, and  some  of  the  dry  rolling  uplands  might  be  used  for 
colonization  purposes,  if  wisely  purchased  and  handled.  It  was  inter- 
esting to  note  that  the  owners  of  lands  heavily  charged  with  alkali, 


Circular  247]   colonization  and  rural  development  in  California  35 

or  that  were  located  far  out  on  the  deserts  without  any  water  supply, 
cheerfully  offered  them  to  the  state  for  subdivision  and  colonization 
purposes.  And  some  of  these  owners  were  indignant  when  their  lands 
were  rejected  as  unfit  for  the  purpose ! 

The  bids  for  the  second  colony  brought  essentially  the  same  results. 
There  were  sixty-four  bona  fide  offers,  totalling  515,547  acres.  Table  2 
shows  a  grouping  of  these  tracts  into  classes. 

TABLE  2 
Tracts  Offered  for  the  Second  Colony 

Tracts  Acres 

Good  soils  and  water  supply 10  52,525 

Fair  soils  and  water  supply 9  57,402 

Fair  soils  but  poor  water  supply 2  11,907 

Poor  soils,  shallow,  or  hardpan 13  71,880 

Alkali  present  in  quantity 12  90,747 

Dry  rolling  uplands 7  120,083 

Deserts,  no  available  water 4  78,400 

Peat  lands,  reclaimed 6  26,623 

" Land"  submerged  below  tide 1  8,000 


64  515,547 

The  highly  desirable  soils  here  are  about  10  per  cent  of  the  whole, 
the  area  of  fair  soils  being  about  the  same,  while  the  dry  uplands  are 
over  one-fifth  of  the  whole.  Lands  that  it  is  practically  impossible  to 
successfully  colonize,  poor  lands,  deserts,  alkali  plains,  or  submerged 
tide  lands  embrace  almost  one-half  of  the  total  area  tendered! 

This  emphasizes  the  need  for  careful  examination  by  experts  of 
the  lands  that  are  offered  for  subdivision,  the  same  kind  of  examina- 
tion that  is  required  for  water  supplies,  reservoir  sites,  canal  locations, 
etc.  It  emphasizes  the  need  for  a  careful,  intelligently  directed  study 
of  the  entire  plan  of  operation,  the  kind  of  a  colony  to  be  established, 
the  type  of  farming,  the  crops  to  be  grown,  the  relative  size  of  allot- 
ments necessary  for  a  successful  farm  unit — all  these  matters  must 
be  considered  before  the  suitability  of  the  tracts  offered  can  be  known 
and  certainly  this  suitability  should  be  established  before  the  purchase 
of  a  tract  for  colonization. 

Many  soils  supply  conditions  favorable  to  the  growth  of  crops 
of  diverse  character ;  some  crops  can  adapt  themselves  to  a  wide  vari- 
ation in  soil  conditions.  On  the  other  hand,  many  crops  and  many 
soils  are  markedly  limited  in  range  of  adaptability.  The  character 
of  the  soil  is  often  the  main  factor  in  determining  the  development 


36  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

of  a  crop  in  a  given  region.  Lodi  is  famous  for  the  high  quality  of 
its  table  grapes.  The  area  devoted  to  the  production  of  these  grapes 
is  limited  almost  exclusively  to  the  fine  sandy  soils  of  the  Hanford 
series.  The  added  difficulties  of  tillage  and  irrigation  and  the  lower 
yields  have  prevented  the  extension  of  the  industry  to  the  hardpan 
lands  or  to  the  heavy  adobe  soils  that  adjoin  the  Lodi  district.  A 
prospective  grower  of  table  grapes  should  know  these  facts,  and  not 
merely  locate  near  Lodi  but  be  sure  to  locate  on  the  soils  that  will 
give  profitable  results.  The  growing  of  purple  vetch  for  seed  in 
Humboldt  County  is  limited  almost  exclusively  to  the  soil  type  known 
as  the  Rohnerville  silt  loam.  Fields  grown  on  other  soils  give  unsat- 
isfactory results.  Until  the  introduction  of  rice  growing,  the  "Willows 
clay  adobe  was  considered  practically  worthless,  of  use  only  as  poor 
pasture  range.  Now  these  soils  are  producing  good  yields  of  rice  and 
their  value  has  markedly  risen. 

Often  the  owners,  or  the  agents  for  the  owners  of  the  tracts  ten- 
dered, do  not  know  the  real  character  of  the  land  they  offer.  One 
agent  was  astonished  to  find  that  all  of  his  choice  offerings  were  under- 
laid by  a  layer  of  dense  hardpan  at  a  relatively  shallow  depth.  He 
had  judged  the  ranch  on  the  basis  of  its  yields  as  a  dry-farmed  grain 
farm,  and,  as  it  was  well  handled,  the  results  were  fine.  But  with 
irrigation  and  the  growth  of  deep-rooted  crops,  the  hardpan  layer 
would  be  a  very  serious  if  not  dangerous  feature,  and  it  was  too  thick 
to  be  economically  broken  by  explosives,  even  for  trees !  Another 
man,  the  owner  of  the  land,  who  spent  some  time  telling  of  the  great 
possibilities  of  his  ranch,  after  watching  the  examination  for  a  day, 
anxiously  asked  if  we  would  advise  him  to  sow  barley  on  the  best 
section  in  the  place,  and  asked  if  we  thought  it  was  a  good  gamble. 
It  was  not. 

These  incidents  bring  out  the  need  for  a  soil  examination  and  soil 
survey  of  all  our  lands,  whether  in  the  hands  of  owners  who  are  oper- 
ating farmers  or  in  the  hands  of  people  who  are  planning  to  sell  to 
others.  The  successful  growth  of  a  plant  depends  on  its  root  environ- 
ment, on  the  character  of  the  deeper  layers  of  the  soil.  In  planning 
farm  operations  or  planning  the  possible  development  of  a  subdivision, 
the  character  of  these  deeper  layers  must  be  known  before  intelligent 
decisions  can  be  reached.  The  areas  where  the  soils  are  deep,  uniform, 
and  otherwise  desirable  should  be  known  and  should  be  accurately 
delineated  upon  a  map  of  the  tract.  The  areas  that  are  underlaid  by 
hardpan,  which  might  very  materially  interfere  with  root  develop- 
ment or  successful  irrigation,  should  likewise  be  known  and  their 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    37 

location  shown.  Soils  affected  by  alkali  or  areas  that  have  unfavor- 
able or  difficult  textures,  such  as  clays  and  clay  adobes,  should  be 
indicated  on  the  map  so  that  any  plans  for  farm  operations  and  devel- 
opment can  take  cognizance  of  the  difficulties  and  limitations  of  these 
soils.  With  a  knowledge  of  the  soil  and  subsoil  conditions  over  the 
entire  ranch,  the  farmer  can  plan  his  plantings  or  his  tillage  opera- 
tions in  such  a  way  that  the  best  results  can  be  obtained  from  each 
of  the  different  kinds  of  soil,  and  he  will  know  what  must  be  done  in 
order  to  overcome  the  difficulties  and  improve  the  conditions  which 
would  interfere  with  the  proper  development  of  his  crops.  He  will 
know  that  he  must  provide  for  more  frequent  and  lighter  irrigations 
on  the  lands  with  sandy  textures,  or  with  coarse  sandy  or  gravelly 
subsoils;  he  will  know  that  he  must  expend  considerable  effort  and 
money  in  breaking  up  the  hardpans  by  explosives  or  by  subsoilers 
before  he  can  expect  good  development  of  deep-rooted  crops;  he  will 
know  and  appreciate  the  more  limited  group  of  crops  that  can  be 
successfully  grown  on  his  adobe  soils;  and  he  can  better  appreciate 
the  difficulties  that  lie  in  the  way  of  successful  reclamation  and  devel- 
opment of  those  areas  that  might  be  affected  by  accumulations  of 
alkali.  Even  if  all  the  land  is  of  good  quality,  free  from  hardpans 
or  other  unfavorable  conditions,  there  may  be  differences  involving 
variations  in  water  relations  that  would  call  for  care  and  judgment  in 
the  plans  for  cropping,  for  tillage,  and  for  irrigation.  An  adequate 
knowledge  of  the  soil  that  is  being  cropped  is  essential  to  permanent 
success  of  any  farming  venture. 

The  point  I  have  tried  to  make  in  this  paper  is  this :  We  must  have 
an  adequate  knowledge  of  the  commodity  we  are  selling,  the  soil ; 
we  must  have  an  accurate,  scientific  inventory  of  this  commodity — 
a  soil  survey,  and  we  must  put  the  commodity  on  the  market  at  prices 
which  are  based  on  its  actual  value,  piece  by  piece,  variable  though 
it  may  be.  We  must  sell  on  the  basis  of  a  full  knowledge  of  the  pro- 
ductive value  of  our  soils  if  we  wish  contented,  permanent  settlers  in 
our  colonies,  solid,  conservative  citizens  in  our  State. 


38 


UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 


SOIL    MAP   &    SUBDIV/SIONAL     PLAN 

DURHAM     STATE     LAND    SETTLEMENT 

LOCATCO     AT      DURHAM.    BUTTE    CO,  CALIFORNIA 
SCA  LE      I , , , ,      ... 


Soil  map  and  subdivisional  plan,  Durham  State  Land  Settlement,  located  at  Durham, 

Butte  County,  California. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    39 


CAPITAL  REQUIRED  BY  CALIFORNIA  SETTLERS 
By  R.  L.  ADAMS 


IMPORTANCE    OF    CAPITAL 

Among  the  factors  vital  to  successful  farming,  probably  none  out- 
ranks that  of  sufficient  capital.  It  is,  of  course,  but  one  element  in 
the  business  of  farming;  to  it  must  be  added  knowledge  of  farming 
methods,  of  crop  requirements,  and  of  stock  handling ;  experience  in 
handling  details;  personal  ability;  a  liking  for  the  work.  Success 
in  farming  does  not  rest  wholly  on  capital ;  but  recognition  that  capital 
is  important  is  in  itself  a  protection.  The  next  step  is  to  see  clearly 
how  much  capital  is  required  to  safeguard  the  investor  and  how  it 
should  be  prorated  and  budgeted. 

CAPITAL  COVERS  CASH  AND  CREDIT 

From  the  settler's  standpoint,  the  procuring,  equipping,  and  carry- 
ing on  of  any  farm  business  represents  a  considerable  investment. 
The  required  funds  need  not,  however,  be  all  cash  in  hand.  The  term 
fi capital,"  in  its  broadest  sense,  covers  credit  as  well  as  cash.  This 
credit  may  be  available  in  the  form  of  deferred  payments  for  land, 
extension  of  time  before  payment  is  demanded  for  purchase  of  mater- 
ials, feed,  groceries,  etc.,  or  deferment  of  interest  charges. 

By  taking  advantage  of  credit  available  through  local  and  federal 
bank  loans,  purchase  of  supplies  on  time,  and  advance  payments  on 
future  deliveries  of  crops  and  stocks,  men  of  limited  means,  but  some 
cash,  and  otherwise  properly  qualified,  may  undertake  farming  for 
themselves. 

CAPITAL  NEEDS  ARE  VARIABLE 

A  grower  setting  out  an  orchard  with  the  prospect  of  several  years ' 
wait  before  returns  from  his  sales  of  fruit  will  cover  his  operating 
expenses,  faces  a  very  different  situation  from  that  of  the  man  who 
is  putting  in  a  crop  of  potatoes  or  beans  or  some  other  annual  crop 
from  which  full  returns  may  be  expected  by  the  end  of  the  first 
season. 

To  embark  in  the  cattle  business  with  a  small  herd  of  breeding 
stock  and  to  wait  until  the  calves  are  fit  to  market  means  different 
capital  need  than  that  necessary  to  finance  a  field  crop.     A  family 


40  UNIVERSITY  OF   CALIFORNIA EXPERIMENT  STATION 

going  into  egg  production  and  planning  to  develop  a  2000-fowl  plant 
faces  a  distinctive  allocation  of  the  total  capital  needs.  Rundown 
soils  that  call  for  immediate  upbuilding  require  funds  not  needed  by 
fertile  lands. 

Capital  requirements  are  materially  affected  by  the  price  of  land ; 
by  the  number,  kind,  size,  and  variety  of  equipment,  buildings,  fenc- 
ing, motive  power,  livestock,  implements  and  machinery,  as  deter- 
mined by  the  kind  of  business,  soil  types,  and  climatic  conditions; 
by  the  costs  of  clearing,  preparing  for  irrigation  or  draining;  by 
personal  considerations,  such  as  size  of  family,  standard  of  living, 
family  living  arrangements ;  by  operating  expenditures  for  seed,  feed, 
repairs  and  parts,  sacks,  boxes,  lumber,  water,  taxes,  labor;  the  items 
and  their  amounts  differing  for  different  businesses.  The  extent  of 
this  variation  is  realized  in  passing  through  a  farming  country  and 
observing  the  variations  in  size  of  farms ;  the  widely  divergent  types 
of  farming  with  the  attendant  differences  in  equipment  and  operating 
needs,  in  styles  and  costs  of  buildings  and  other  structures ;  the  nation- 
ality of  the  farmers  as  it  bears  on  size  of  family  and  standard  of 
living;  the  number  of  automobiles,  trucks,  and  tractors.  If  one 
wishes  a  specially  fascinating  problem,  he  can  find  it  in  attempting 
to  estimate  the  capital  needs  of  any  ten  farms  of  outstanding  differ- 
ences in  plan  and  method  of  operating.  When  one  unacquainted  with 
farm  needs  does  this,  and  follows  it  with  a  similar  study  of  20  or  30 
farms  typical  of  the  particular  kind  of  farming  that  he  wishes  to 
follow,  a  better  understanding  of  his  capital  needs  accrues. 

Individual  determination  necessary. — To  safeguard  the  finances 
necessary  to  establish  and  carry  on  a  business,  each  proposed  plan 
should  be  worked  out  by  itself  through  a  careful  tabulation  of  probable 
expenses  and  receipts.  No  general  rule  of  practical  value  can  be 
given,  since  capital  needs,  as  already  stated,  vary  between  wide 
extremes. 

ESTIMATING    AND    GROUPING    CAPITAL    NEEDS 

The  determination  of  capital  requirements  is  aided  by  making  some 
such  grouping  of  items  as  that  given  below.  The  main  precautions 
to  observe  in  making  an  estimate  are:  (a)  to  include  all  items  of 
expense,  (6)  to  cover  all  possible  receipts,  (c)  to  exercise  discretion 
in  estimating  both  expenses  and  receipts  so  that  the  figures  will 
approximate  actual  conditions  as  closely  as  possible.  Too  much  pyra- 
miding of  expenses  may  do  the  business  an  injustice ;  too  optimistic 
a  statement  covering  receipts  may  later  work  a  hardship  in  making 
up  a  deficiency.     Each  item  should  be  carefully  scanned,  and  figures 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    41 

from  all  available  data  used,  with  as  few  offhand  estimates  as  possible, 
so  that  the  final  result  may  represent  a  conservative,  carefully  worked- 
out  and  clearly  drawn-up  statement  of  the  probable  financial  situation. 
The  following  grouping  is  not  fixed ;  it  may  be  varied  to  suit  indi- 
vidual cases. 

(a)  Purchase  of  land. — The  sum  needed  will  be  either  for  outright 
purchase  or  for  the  first  payment.  If  for  the  latter  only,  it  is  essential 
to  give  most  careful  and  practical  consideration  to  subsequent  pay- 
ments of  both  principal  and  interest. 

(6)  Necessary  improvements. — If  upon  raw  land,  there  may  be 
expenditures  required  for  checking,  making  ditches,  building  lanes, 
bridging,  fencing,  levelling,  removing  natural  vegetation,  and  the  like. 
A  water  supply  for  domestic  use  or  for  irrigation  is  important.  The 
study  should  include  the  cost  of  equipment,  such  as  casing  for  wells, 
drilling  wells,  windmill,  motor,  gasoline  engine,  pump,  tank  and  tower, 
reservoir,  piping,  or  provision  for  whatever  method  is  used  in  obtain- 
ing and  conveying  the  water. 

Sanitary  provisions  for  proper  disposal  of  sewage  from  house  and 
conservation  of  manure  from  the  barns  come  within  this  group. 

(c)  'Equipment. — Buildings  are  a  substantial  item.  Dwelling, 
barn,  implement  shed,  milking  shed,  poultry  houses,  hog  pens,  are  to 
be  considered. 

Under  this  group  comes  also  an  estimate  of  the  money  needed  to 
provide  the  various  implements,  tools,  wagons,  and  machinery,  for 
carrying  on  the  business.  As  the  kind  and  amount  vary  with  the 
business,  it  is  necessary  to  make  an  individual  determination  for  every 
case. 

Under  this  heading  should  also  be  included  the  necessary  work 
stock,  tractors,  engines,  automobiles,  and  the  livestock  required  by  the 
business,  e.g.,  dairy  cows,  hogs,  poultry,  beef  cattle,  sheep. 

Nursery  stock  for  orchard,  vineyard,  or  garden  may  be  grouped 
under  this  heading. 

(d)  Operating  expenses. — It  is  especially  necessary  when  starting 
a  new  business  to  allow  a  sufficient  sum  for  carrying  on  the  work  until 
the  plan  is  in  full  operation.  This  sum  must  cover  all  possible 
expenditures  for  such  things  as  hired  labor,  horse  feed,  blacksmith 
and  harness  bills,  seed,  fertilizers,  axle  grease,  oil,  gasoline,  cotton 
waste,  and  the  many  other  items  incident  to  a  farm  business. 


42  UNIVERSITY  OF   CALIFORNIA EXPERIMENT  STATION 

(e)  Personal  expenses. — This  is  of  course  an  individual  item.  It 
covers  both  household  furnishings  and  family  living  expenses,  such 
as  grocery  and  butcher  bills,  clothing,  books,  entertainment,  travel, 
and  the  various  family  demands  upon  the  cash  budget. 

If  desired  the  items  may  be  classified,  or  reclassified,  under  the 
four  headings  of : 

1.  Investment  items. 

2.  Operating  items. 

3.  Personal  items. 

4.  Overhead  items. 

Investment  items  cover  proposed  expenditures  for  land,  equip- 
ment, implements,  work  stock,  dairy  cows,  and  other  things  which 
are  used  over  and  over. 

Operating  items  comprise  those  things  in  the  payment  for  which 
capital  is  exhausted,  such  as  outlays  for  labor,  feed,  seed,  taxes,  elec- 
tricity, baling,  threshing. 

Overhead  items  involve  sums  to  maintain  the  equipment,  to  cover 
depreciation,  and  to  meet  interest  on  borrowed  moneys  and  deferred 
payments. 

Personal  items  are  for  house  furnishings,  personal  and  living 
expenses,  and  anything  that  does  not  directly  involve  the  farm  busi- 
ness. 

Cost  of  building  equipment. — The  cost  of  buildings  satisfactory 
for  the  purpose  for  which  they  were  erected,  avoiding  the  extremes 
of  cheapness  and  extravagance,  for  California  conditions  existing 
prior  to  the  high  prices  of  1919-20,  is  shown  in  the  subjoined  table. 
The  range  shows  the  limits  within  which  suitable  structures  are  obtain- 
able under  pre-war  rates  for  materials  and  labor ;  the  average  gives 
the  cost  of  the  majority  of  structures  within  the  range.  These  costs 
are  taken  from  actual  buildings  erected  upon  typical  family-sized 
farms.    They  are  not  applicable  to  large  holdings. 

Building  equipment  costs  are  influenced  by  type  of  structures, 
climatic  conditions,  size,  available  materials,  framing,  and  finish,  skill 
of  workers,  personal  choices,  and  available  capital,  so  that  local  con- 
ditions may  cause  variations  from  the  data  here  presented. 


Circular  247]    COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    43 


Fig.  5. — Neat  set  of  farm  buildings  typical  of  many  new  farmsteads. 


Fig.  6,— Buildings  constructed  to  conserve  capital  and  to  allow  for  additions  when 
needed  or  when  funds  are  available. 


44  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

TABLE  1 

Showing  Costs  of  Material  and  Labor  for  Ordinary  Farm  Structures 

Costs 

. A ! 

t  ~\ 

Structures  Range  Average 

Farm  dwellings,  per  room  capacity $110.00-$920.00  $475.00 

Bunkhouses,  per  man  capacity 50.00-  150.00  95.00 

Farm  barns,  per  horse  capacity 31.00-  156.00  90.00 

Milking  barns,  per  cow  capacity 12.00-  105.00  46.00 

Silos,  wooden,  per  ton  capacity 1.60-       3.33  2.45 

Hog  houses,  per  pen 13.00-     80.00  42.00 

Poultry  houses,   per   fowl .37-       1.87  .76 

Water  towers  and  tank 90.00-  250.00  200.00 

Implement   sheds,   per   square   foot   of   floor 

space    .18-         .70  .37 

Settlers  who  possess  sufficient  mechanical  ability  to  do  the  neces- 
sary carpenter,  plumbing,  glazing,  and  finishing  work  on  the  required 
farm  structures  can  reduce  their  cash  costs  from  the  tabulated  data 
given  above  in  direct  proportion  to  the  amount  of  labor  that  they  can 
personally  furnish.  Ordinarily,  total  costs  as  shown  in  Table  1  are 
made  up  of  materials  and  labor  in  the  proportions  shown  in  the  fol- 
lowing table. 

TABLE  2 
Proportion  of  Labor  to  Total  Cost  of  Structures 

•  Percentage  of  total  cost  for  labor 


Range,  Average, 

Structure  per  cent  per  cent 

Ranch  dwellings   20-50  40 

Bunkhouses : 20-35  30 

Horse  barns  25-50  40 

Milk   barns 12-331/j  25 

Silos,  wooden 20-40  30 

Hog  houses  20-40  30 

Poultry  houses 20-40  30 

Tank  towers 20-40  25 

Implement  sheds 20-35  25 


Circular  247]    colonization  and  rural  development  in  California  45 

Cost  of  implements  and  machinery. — The  next  table  shows  the  costs 

of  selected  items  of  farm  equipment  based  on  averages  of  pre-war  and 
post-war  figures.  These  data  give  an  idea  of  the  required  outlay  for 
implements  and  machinery. 

TABLE  3 

Cost  of  Implements  and  Machinery 

Item  Cost 

Cultivators,   one  horse - $9.00 

Cultivators,  two  horse 65.00 

Derricks,  hay,  14  ft,  mast 110.00 

Electric  motors 

5  H.P 115.00 

10   H.P 210.00 

20  H.P 315.00 

Gasoline  engine 

5   H.P 220.00 

10  H.P 388.00 

20   H.P - 1345.00 

Harrows 

8  ft.  disk 90.00 

Spike,   16  ft 24.00 

Spring  tooth,  9  ft 20.00 

Mower,   5   ft 85.00 

Planters,  2  row,  corn  or  bean 60.00 

Plows,  breaking,  14  in.  single 27.00 

Plows,  disk,  24  in.,  one  disk 82.00 

Plows,  disk,  24  in.,  two  disks 134.00 

Plows,  two  12  in.  or  14  in.  gang 101.00 

Plows,  14  in.  single  sulky 81.00 

Plows,  12  in.  walking 25.00 

Plows,  14  in.  walking _ 28.00 

Pumps,  2  in 75.00 

Pumps,   3  in 110.00 

Pumps,  4  in 140.00 

Eake,  12  ft.  horse 55.00 

Scrapers,  Fresno  5  ft 28.00 

Seeders,  broadcaster  32.00 

Drill,  10  ft.,  steel  wheels 155.00 

Wagons,   buggy   103.00 

Wagons,  single 94.00 

Wagons,  iy2  ton 160.00 


46 


UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 


Cost  of  work  stock. — Good,  serviceable  work  horses  are  obtainable 
for  from  $125  to  $175  per  head. 

Cost  of  livestock  other  than  work  stock. — Present-day  prices  for 
live  stock  other  than  work  stock  for  the  usual  commercial  type  of 
animal  run  about  as  follows  :* 


TABLE  4 
Cost  of  Live  Stock  other  than  Work  Stock 


Item 
Beef  cows,  grade 
Beef  cows,  pure  bred 
Beef  bulls,  pure  bred 
Beef  yearlings 
Beef  heifers 
Dairy  cows,  grade 
Dairy  cows,  pure  bred 
Dairy  bulls,  pure  bred 
Dairy  yearlings 
Dairy  heifers 
Poultry,  day  old  chicks 
Poultry,  3  months  pullets 
Poultry,  mature  hens 
Poultry,  mature  roosters 
Sheep,  registered  ewes 
Sheep,  registered   bucks 
Sheep,  grade  ewes 
Sheep,  grade  bucks 
Swine,  pure  bred  sows 
Swine,  pure  bred  boars 
Swine,  grade  sows 
Swine,  gilts 


Cost  each 
$35.00-  $30.00  or  beef  price  plus  25  per  cent. 
100.00-  400.00 
100.00-1000.00 
Beef  price 
Beef  price,  or  if  bred  add  25  per  cent 

75.00-  150.00 
150.00-  500.00 
250.00-1000.00 

75.00 


100.00 

.16 

9.00- 

15.00 

per 

dozen 

15.00- 

24.00 

per  dozen 

10.00  each 

25.00- 

75.00 

35.00- 

150.00 

3.50- 

8.00 

or 

mutton 

price 

plus 

50 

per 

cent 

15.00- 

25.00 

40.00- 

150.00 

40.00- 

500.00 

25.00- 

75.00 

or 

pork  p: 

rices 

plus 

10 

per 

cent 

Market  price,  or  if  bred  plus  50  per  cent. 


Cost  of  minor  equipment. — Costs  of  selected  items  of  minor  equip- 
ment are  indicated  in  Table  5,  based  on  the  average  of  pre-war  and 
post-war  prices  for  the  past  six  years. 


*  As  of  January  2,  1922,  quotations  from  the  Divisions  of  Animal  Husbandry 
and  Poultry  Husbandry. 


TABLE  5 

Costs  of  Minor  Equipment 

Item  Cost 

Fencing,  pine  lumber,  average  per  1000  board  feet $35.00 

Fencing,  redwood  lumber,  average  per  1000  board  feet 45.00 

Fencing,  posts,  4X5  in.,  7  ft.,  split .30 

Fencing,  pickets,  3X3  in.,  7  ft.,  split .18 

Fencing,  barb  wire,  per  100  lbs 4.50 

Fencing,  woven  wire,  32  in.,  per  rod .55 

Fencing,  poultry,  2  in.  mesh,  per  square  foot .01 

Fencing,  poultry,  1  in.  mesh,  per  square  foot .015 

Fencing,  staples,  per  lb .08 

Fencing,  wire   stretcher   5.00 

Cement,  per  100  lbs. .85 

Nails,  lbs.,   base 5.00 

Paints,   per   gallon 3.50 

Windmills,   10  ft 75.00 

Water  tanks,  1500  gallons 40.00 

Brooms .75 

Grindstone     6.50 

Halters     . 2.00 

Harness,  single  25.00 

Harness,  work,  double   (leather)  55.00 

Harness,  work,  double    (chain)  45.00 

Horse  collars  8.00 

Lanterns    .- 1.25 

Lead  bars,  single,  per  dozen 6.00 

Lead  bars,  double,   per   dozen 12.00 

Rope,  per  lb .20 

Water  pipe,  black,  %  in.,  per  foot .06 

Water  pipe,  black,  1*4  in.  per  foot .08 

Water  pipe,  galvanized,  %  in.,  per  foot .13 

Water  pipe,  galvanized,  1%  in.,  per  foot .17 

Wheelbarrows  5.75 

Axes  1.75 

Hoes .85 

Picks    1.25 

Pitchfork  1.25 

Shovels  1.25 

Well  casing,  per  foot,  double,  12  gauge,     8  in 2.25 

Well  casing,  per  foot,  double,  12  gauge,  10  in 3.00 

Well  casing,  per  foot,  single,  with  collar,  12  gauge,  8  in 2.50 

Well  casing,  per  foot,  single,  with  collar,  12  gauge,  10  in.  ..  3.25 

Milk  separators,  335  lbs.  size 75.00 

Milk  separators,  675  lbs.  size  ! 110.00 

Milk  cans,  10  gallon  size 4.50 

Milk  pails,  10  quart  size 2.50 

Fruit  drying  trays— 3  ft.  X  8  ft .45 

Fruit  lug  boxes,  50  lbs.  size .20 

Fruit  pruning  shears,    short    2.50 

Fruit  pruning  shears,  long 3.00 

Fruit  spraying  outfit,  hand  60.00 

Fruit  spraying  outfit,  poAver 300.00 


48  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 


ESTIMATING    POSSIBLE    RETURNS 

Estimates  of  possible  returns  should  be  carefully  made.  Against 
the  capital  needs  are  to  be  put  the  possible  sources  of  income,  from : 

(a)  The  different  ranch  activities 

(b)  Payment  for  services  when  working  for  others,  such  as  road 
work,  caring  for  property  of  non-residents,  hauling,  or  (if  the  owner 
has  a  trade  which  can  be  followed  at  odd  times)  such  work  as  plumb- 
ing, bookkeeping,  clerical  or  secretarial  work,  etc. 

One  should  recognize,  however,  that  the  amount  of  special  service 
that  one  can  do  is  usually  limited  in  most  neighborhoods.  A  careful 
investigation  should  be  made  in  the  community  where  one  expects  to 
settle,  and  care  used  in  estimating  the  possible  income  from  this  source. 
This  is  especially  true  of  farm  work  that  must  be  done  within  limited 
periods  of  time,  sine?,  when  the  pressure  on  the  home  place  is  over, 
outside  places  similarly  will  no  longer  be  demanding  labor. 

There  are  various  other  sources  of  immediate  income,  however,  as 
for  example,  intercrops  between  young  fruit  trees ;  growing  small  lots 
of  truck,  seed,  cannery  stuff,  or  berries;  making  jellies  and  canning 
fruit  for  sale ;  selling  the  product  from  a  few  dairy  cows,  several  hives 
of  bees,  a  flock  of  hens,  or  some  brood  sows ;  cutting  firewood ;  working 
out  with  or  without  team.  In  estimating  possible  returns  from  such 
sources,  care  must  be  constantly  exercised  to  use  dependable  data, 
computed  only  after  market  conditions  are  investigated  and  costs  of 
putting  into  marketable  shape  are  taken  into  account.  The  yields  of 
such  products  roughly  estimated  in  an  offhand  way,  are  frequently 
not  obtained  in  practice,  so  that  later  the  calculated  income  is  seriously 
curtailed. 

The  same  care  should  be  exercised  in  determining  the  items  of 
family  living.  After  a  compilation  of  the  total  annual  needs  of  the 
operator  and  his  dependents,  shelter,  food,  clothing,  entertainment, 
medical  service,  charity,  schooling,  etc.,  a  careful  estimate  is  made  of 
what  the  farm  can  supply  in  the  way  of  house  rent,  fuel,  eggs,  poultry, 
pork,  fruit,  vegetables,  milk,  and  butter.  The  difference  between 
what  is  needed  and  what  the  farm  can  supply  indicates  the  amount 
of  cash  which  must  be  provided  for  family  use. 

The  safety  factor. — Since  there  are  likely  to  be  contingencies  that 
cannot  be  specifically  provided  against,  it  is  well  to  add  a  certain  per- 
centage to  the  costs  of  establishment  and  of  operating  funds.  This 
percentage  is  variable  and  fluctuates  with  many  factors.  For  instance, 
a  probability  of  lower  prices  will  increase  the  percentage,  a  probability 
of  higher  prices  reduce  it.     Other  factors  influencing  the  amount  to 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    49 

add  are  the  extent  of  one's  training,  knowledge,  health,  strength,  and 
experience ;  the  potential  capacities  of  the  property,  the  availability 
of  necessary  labor,  the  size  of  the  business,  its  degree  of  stability,  the 
amount  of  help  to  be  expected  from  one's  family,  and  similar  items. 

A  safety  factor  of  5  per  cent  may  be  sufficient  for  conditions  that 
are  considered  favorable.  This  implies  a  frugal,  resourceful  operator 
who  knows  his  business  and  the  conditions  under  which  he  is  to  operate 
and  who  is  not  afraid  of  hard  work;  whose  farming  is  of  a  stable 
character ;  whose  farm  is  a  proven  producer  and  of  sufficient  size ; 
whose  markets  are  reasonably  sure ;  and  whose  family  can  be  counted 
upon  to  lend  physical  and  moral  support  and  to  practice  due  economy. 
From  this  low  figure  of  5  per  cent,  the  rate  may  be  increased  to  as 
much  as  20  per  cent  if  the  conditions  involve  a  relatively  high  degree 
of  ignorance  of  farming  or  of  the  locality,  or  of  doubt  whether  the 
business  is  large  enough  to  meet  expected  obligations ;  if  they  involve 
questions  as  to  the  working  capacity  of  the  operator  or  the  living 
requirements  of  his  family,  or  the  producing  power  of  the  farm,  or 
the  receptivity  of  the  markets. 

Living  expenses. — Living  income  may  be  defined  as  that  sum  of 
money  which  a  family  should  command  each  year  to  cover  ordinary 
expenditures  for  shelter,  food,  fuel,  light,  clothing,  entertainment, 
ordinary  education,  medical  services,  and  contributions  to  charity. 
A  determination  of  the  sum  that  will  fulfill  these  conditions  consti- 
tutes a  basis  for  discussing  the  necessary  size  of  the  business  and  the 
capital  required  to  establish  and  operate  that  business. 

Investigations  based  on  normal  conditions  indicate  that  a  cash 
income  for  an  average  family  of  man,  wife,  and  three  children  in  the 
city  should  amount  to  from  one  thousand  to  twelve  hundred  dollars 
per  year,  while  in  the  country  the  sum  ranges  from  five  hundred  to 
six  hundred  dollars  in  cash.  The  difference  between  figures  for  city 
and  country  is  due  to  the  fact  that  the  farm  furnishes  house,  water, 
fuel,  fruits,  vegetables,  poultry  and  dairy  products  for  family  use, 
in  whole  or  in  part,  while  in  addition,  less  expenditures  are  usually 
sufficient  for  minor  items,  such  as  car  fare  and  entertainment. 

An  additional  sum  above  the  $600  set  forth  must  be  available  for 
educating  children  beyond  the  grammar  grades. 


50 


UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 


INCOME-PRODUCING    CAPACITY    OF    FULLY    DEVELOPED    LANDS    AND 

PLANTINGS 

The  income  from  farm  lands  depends  on  the  kind  of  crop,  amount 
of  production,  prices  obtainable,  and  costs  of  growing.  The  income 
possibilities  of  fully  developed  lands  capable  of  producing  usual  yields, 
based  on  pre-war,  that  is,  normal  conditions,  are  tabulated  below. 
The  various  columns  show:  (1)  the  crop,  (2)  the  yield  under  usual 
commercial  production,  (3)  the  gross  farm  receipts,  (4)  the  sum 
available  to  the  operator  after  deducting  all  necessary  cash  outlays 
for  seed,  water,  taxes,  containers,  packing,  sulphuring,  etc.  No  deduc- 
tion is  made  for  either  horse  or  man  labor,  or  for  use  of  equipment. 
If  the  operator  hires  others  to  do  any  or  all  of  the  work,  deductions 
for  such  outlays  must,  of  course,  be  made. 

Horse  expense  depends  on  the  size  of  the  farm,  investment  in 
work  animals,  amount  of  work  done  annually,  and  cost  of  maintenance. 
The  charge  varies  from  $75  to  $150  per  year  per  animal. 

If  the  crops,  when  suitable,  are  fed  to  live  stock,  an  additional 
income  is  obtainable  from  the  sale  of  milk,  pork,  eggs,  or  lambs.  In 
general,  the  returns  from  crops  properly  fed  to  live  stock  are  greater 
than  from  croj)S  sold  as  hay  or  grain,  although  local  conditions  may 
alter  this  general  rule. 

The  tables  give  an  idea  of  possible  returns  from  an  acre  of  crops 
produced  under  commercial  conditions  where  the  operator  himself 
does  most  of  the  work. 


Showing  Acreage  Income 


Usual 

Crop  yield 

Alfalfa 5  tons 

Barley 1200  lbs. 

Beans 1000  lbs. 

Corn    (Indian)  1000  lbs. 

Cotton   (short  staple)  400  lbs. 

Hay    (grain)  1  ton 

Oats 900  lbs. 

Pea   (dry)  800  lbs. 

Potato 55  sacks 

Rice 2500  lbs. 

Sorghum  (grain)  1200  lbs. 

Sugar  beet 10  tons 

Wheat 750  lbs. 


BLE  6 

from  California 

Field 

Crops 

Total  sum 

obtainable 

per  acre 

Cash 
output 
per  acre 

Sum  available 
after  deducting 

necessary  cash 
outlays, 
per  acre 

$50.00 

$17.75 

$32.25 

12.25 

5.36 

6.89 

45.00 

7.53 

37.47 

25.50 

3.55 

21.95 

57.00 

8.75 

48.25 

12.25 

3.75 

8.50 

12.30 

5.75 

6.55 

41.00 

10.80 

30.20 

47.25 

18.10' 

29.15 

47.25 

18,43 

28.82 

15.60 

6.10 

9.50 

(59.50 

7.75 

61.75 

11.45 

4.60 

6.85 

CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    51 


TABLE   7 
Showing  Income  from  Established  Fruit  and  Truck  Crops 


Crop  Usual 
yield 
Fruit  crops 

Almond 700  lbs. 

Apple   (shipping)  150  boxes 

Apricot  (canning  or  shipping)  4  tons 

Apricot  (dried)  f  ton 

Cherry 2  tons 

Fig    (dried)  1  ton 

Grape    (raisin) 1  ton 

Grape    (table)  4  tons 

Lemon 150  boxes 

Olive 1|  tons 

Orange 125  boxes 

Peach  (canning  or  shipping-)...  6  tons 

Peach  (dried)  1  ton 

Pear  (canning  or  shipping) 5  tons 

Pear   (dried) 1  ton 

Plum 3i  tons 

Prune 2  tons 

Walnut £  ton 

Truck  crops 

Cabbage 10  tons 

Onion 140  sacks 

Sweet  potato 3  tons 

Tomato 10  tons 


Total  sum 

obtainable 

per  acre 

Cash 
output 
per  acre 

Sum  available 
after  deducting 

necessary  cash 
outlays, 
per  acre 

$98.00 

$22.00 

$76.00 

117.00 

44.00 

73.00 

100.00 

13.00 

87.00 

155.00 

14.00 

141.00 

202.00 

12.00 

190.00 

80.00 

8.00 

72.00 

65.00 

4.00 

61.00 

60.00 

5.00 

55.00 

375.00 

74.00 

301.00 

111.00 

8.00 

103.00 

219.00 

74.00 

145.00 

120.00 

10.00 

110.00 

102.00 

12.00 

90.00 

150.00 

21.00 

129.00 

160.00 

24.00 

136.00 

105.00 

11.00 

94.00 

160.00 

19.00 

141.00 

120.00 

26.00 

94.00 

137.00 

20.00 

117.00 

112.00 

23.00 

89.00 

75.00 

11.00 

64.00 

142.00 

2.00 

140.00 

These  tables  show  a  range  in  acre  returns  from  $6.55  to  $301.00  for 
crops  after  they  have  become  full-bearing. 

The  profits  from  farming  are  usually  directly  proportional  to  the 
amount  of  labor,  man  and  horse,  which  can  be  usefully  expended  upon 
a  crop.  Much  of  the  sums  shown  as  available  is  in  direct  proportion 
to  the  labor  needed  in  producing  the  various  crops. 

These  tables  are  presented  to  show  something  of  probable  incomes. 
Choice  of  crops  for  a  given  farm  must,  of  course,  be  made  only  in  a 
general  way  upon  data  here  presented.  Soil,  climate,  topography, 
water,  market,  haul,  available  capital,  local  costs,  personal  inclination 
and  experience  are  all  factors  which  must  be  properly  considered  and 
weighed  before  a  decision  is  made.  Fluctuations  in  demand,  reflected 
in  changing  market  prices,  cause  figures  such  as  are  given  in  these 
tables,  to  be  of  illustrative  value  rather  than  of  absolute  application. 


52 


UNIVERSITY  OF   CALIFORNIA EXPERIMENT  STATION 


COSTS    AND    RETURNS    DURING    THE    PERIOD    OF    ESTABLISHMENT 

For  crops  other  than  annuals,  cash  expenditures  are  necessary 
until  the  crop  reaches  the  self-supporting  age.  As  a  general  guide, 
subject  to  variations  for  local  conditions,  a  cash  outlay  for  items  other 
than  labor — horse  and  man,  are  as  shown  below. 


Cash  Costs  Required 


TABLE  8 
and  Incomes  from  Perennial 
Establishment 


Crops  During  Period  of 


Number  of 
years  to 
Crop  maturity- 
Alfalfa     - 1   yr. 

Almond    8  yrs. 

Apple  9  yrs. 

Apricot 6  yrs. 

Cherry    8  yrs. 

Fig   8  yrs. 

Grape   (raisin)   5  yrs. 

Grape    (table)    6  yrs. 

Lemon    9  yrs. 

Olive     8  yrs. 

Orange  9  yrs. 

Peach  6  yrs. 

Pear 8  yrs. 

Plum  , 7  yrs. 

Prune     8  yrs. 

Walnut  10  yrs. 


Gross 

cash  outlay 

per  acre 

Value  of 
probable 
returns 
per  acre 

Reasonable 

expectation 

of  income 

for  entire 

period 
per  acre 

$9.00 

$18.00 

$9.00 

91.00 

196.00 

105.00 

95.00 

"216.00 

121.00 

53.00 

160.00 

107.00 

84.00 

340.00 

256.00 

56.00 

146.00 

90.00 

40.00 

97.00 

57.00 

45.00 

95.00 

50.00 

395.00 

600.00 

205.00 

53.00 

198.00 

145.00 

319.00 

350.00 

31.00 

56.00 

176.00 

120.00 

80.00 

248.00 

168.00 

54.00 

189.00 

135.00 

44.00 

256.00 

212.00 

168.00 

222.00 

54.00 

The  table  shows  that  the  returns  from  intercrops,  alfalfa  and  fruit 
crops,  during  the  period  of  development,  will  cover  all  necessary  cash 
outlays,  where  the  operator  need  make  no  charge  for  the  necessary 
labor  required  for  the  several  years  until  the  alfalfa  or  trees  are 
coming  into  maturity,  and  leave  a  total  surplus  as  shown  in  the  last 
column.  Of  course,  if  labor  and  interest  on  moneys  invested  are 
included  a  different  showing  will  result. 


CAPITAL    REQUIREMENTS    OF    SELECTED    CALIFORNIA    FARMS 

Variations  in  capital  requirements. — In  presenting  financial  data 
of  California  agriculture  one  is  confronted  with  the  great  variation 
in  conditions,  a  variation  which  applies  not  only  to  soil,  water,  climate, 
topography,  market,  and  size  of  holdings,  but  to  wide  differences  in 
individual  opinions,  experiences,  practices,  and  ideals  of  the  various 
men  connected  with  it. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    53 

For  instance :  Provision  for  and  maintenance  of  a  proper  American 
standard  of  living-  as  the  basis  of  all  financial  estimates  is  more  impor- 
tant than  meeting  land  payments.  Yet,  as  to  this  sum,  there  are  wide 
differences  of  opinion  traceable  to  (a)  size,  (b)  ages,  (c)  spending 
activity,  (d)  personal  tastes,  and  (e)  social  obligations,  of  the  family, 
(/)  nationality,  and  (g)  environment  during  childhood.  The  luxuries 
of  one  family  are  the  comforts  of  another,  the  necessities  of  a  third. 
Therefore  no  final,  nor  even  an  especially  definite  average,  figure  can 
be  used  to  represent  a  living  income. 

An  attempt  has  been  made,  however,  to  select  findings  which  rep- 
resent, as  nearly  as  possible,  a  fair  basis  for  considering  the  financial 
aspects  of  typical  industries.  Figures  are  used  which,  from  a  wide 
inquiry,  indicate  a  concensus  of  opinion. 

To  those  who  may  take  exception  to  the  sums  used  here,  it  may 
be  pointed  out  that  no  serious  difficulty  need  be  encountered  in  working 
over  any  data  here  presented  as  to  acreages,  size  of  business,  or  similar 
items,  to  comply  with  any  different  conception  of  what  constitutes 
income  or  expenditures. 

For  instance,  there  may  be  a  wide  difference  of  opinion  concerning 
buildings.  Dwellings,  in  some  cases,  are  erected  at  a  cost  of  six  hun- 
dred dollars  or  less,  including  the  labor  of  construction.  From  this 
low  extreme,  the  prices  paid  for  dwellings  range  to  as  high  as  four 
thousand  dollars  or  more.  Many  settlers  prefer  to  erect  a  small  build- 
ing for  temporary  purposes  at  the  beginning  of  their  activities,  with 
the  idea  of  replacing  or  enlarging  later  on,  when  the  business  will 
warrant  more  elaborate  and  commodious  quarters.  There  are  instances 
of  families  living  temporarily  in  quarters  made  by  partitioning  off  a 
portion  of  the  barn,  or  by  boarding  up  the  water  tank  tower. 

There  is  also  great  variety  in  the  characteristics  of  different  farms. 
Water,  soil,  climate  conditions,  in  one  section  are  very  different  from 
those  in  another.  The  man  so  situated  that  oranges,  lemons,  walnuts, 
or  lima  beans  are  possible  crops  will  reap  rewards  different  from  those 
of  the  man  who  can  raise  only  alfalfa  or  grain,  or  who  is  confined  to 
the  production  of  some  single  variety  of  fruit.  Distance  to  and  recep- 
tivity of  the  market  are  other  influences  which  affect,  in  a  marked 
way,  the  possible  returns  from  such  products  as  truck  stuff,  poultry 
products,  berries,  whole  milk,  and,  to  a  lesser  extent,  grains,  beans, 
potatoes,  pork,  beef,  and  sheep.  Hence,  to  secure  a  living  income 
above  operating  expenses,  the  choice  of  crop  or  industries  also  plays 
a  most  important  part,  and  this  choice  must  be  governed  by  the  facts 
given  above. 


54  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

Businesses  selected  as  typical. — The  capital  needs  of  four  types  of 
businesses  are  given,  viz :  diversified  farms,  deciduous  fruit  farms, 
dairy  farms,  and  poultry  farms. 

As  already  pointed  out,  needs  vary  with  individuals  and  with  local 
conditions  so  that  the  greatest  value  in  these  examples  rests  (1)  in 
illustrating  the  method  of  making  determinations,  and  (2)  in  show- 
ing something  of  the  variations  in  capital  needs  for  different  busi- 
nesses. 

Acreage  requirements. — Using  the  results  of  studies  made  in  many 
widely  separated  localities,  the  size  of  holdings  deemed  necessary  by 
farmers  who  have  had  comparable  personal  experience  under  irriga- 
tion conditions  was  estimated  by  several  hundred  operators  to  neces- 
sitate an  acreage  at  least  to  the  extent  given  in  the  following  table. 

TABLE  9 

Farmers'  Estimates  of  Bequired  Acreages  for  Selected  Businesses 
Sufficient  in  Acreage  to  Support  an  Average  Family 

Business  Range  in  size                                              Usual  size 

Diversified  farming  10-     80  acres                                       40  acres 

Fruit,  deciduous  10-     40  acres                                       20  acres 

Dairying  10-     30  cows,  15-40  acres                 20  cows,  30  acres 

Poultry  1500-3000  fowls,  5-10  acres  2000  fowls,  10  acres 

The  range  of  farmers'  estimates  is  presented  in  the  second  column; 
the  figure  showing  the  majority  opinion  in  the  concensus  of  farmers' 
views  is  in  the  last  column. 

Cost  data. — Land  prices  and  terms  are  so  variable  that  a  more 
or  less  arbitrary  figure  has  been  selected  for  these  items. 

Building  costs  are  for  materials  only,  based  on  costs  as  shown  in 
Table  1, 

Equipment  costs  are  averages  of  pre-war  and  post-war  prices  as 
-shown  in  Tables  3  to  5,  inclusive.. 

Living  is  taken  at  $600  annually. 

Initial  cost  of  household  furnishings  is  placed  at  $400. 

No  interest  on  the  operator's  cash  is  included,  nor  payment  for 
the  operator's  labor  other  than  to  the  extent  covered  in  the  $600 
allowed  for  living  expenses. 

All  cash  requirements  for  taxes,  insurance,  boxes,  sacks,  etc.,  are 
included. 


CIRCULAR  247]     COLONIZATION  AND  RHRAL  DEVELOPMENT  IN  CALIFORNIA    55 


Fig.  7. — Typical  box-barn  of  the  Sacramento  Valley. 


Fig.  8. — Economical  open-type  milking  barn  of  the  San  Joaquin  Valley. 


56  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

Explanation  of  the  tables. — For  convenience  of  study,  our  financial 
calculations  are  set  forth  in  a  series  of  tables.  The  first  table  gives 
the  findings  for  a  diversified  farm  and  shows  details  as  well  as  totals. 
The  other  tables  contain  summaries  only.  The  plan  utilized  is  to 
provide  a  column  for  each  year  of  the  number  required  to  complete 
all  land  payments  and  to  place  each  expense  or  receipt  item  in  the 
column  representing  the  year  in  which  the  expenditures  or  sale  takes 
place.  For  purposes  of  easy  reference,  the  various  expense  items  are 
grouped  into  (a)  investment,  (b)  operating,  (c)  personal,  (d)  over- 
head. An  idea  of  the  items  coming  under  these  different  headings 
can  be  gained  from  a  study  of  Table  10.  All  columns  are  totaled  for 
the  purpose  of  showing  the  actual  expenditures  to  be  met  during  each 
year,  the  amount  of  receipts  which  may  reasonably  be  expected,  the 
net  needs  for  a  given  year  after  the  receipts  are  deducted,  that  is  the 
cash  needs,  and,  lastly,  the  accumulation  of  net  needs  from  one  year 
to  the  next  up  to  and  including  the  year  in  question,  as  a  measure 
of  the  total  capital  which  is  required  to  properly  insure  necessary 
financing. 

The  value  of  these  tables  rests  largely  in  showing  the  character  of 
items  which  must  be  met  and  in  giving  a  rough  idea  of  approximate 
capital  requirements  for  the  types  of  farming  here  discussed.  But, 
because  these  figures  are  taken  from  a  large  number  of  farms,  they 
are  average,  and,  hence,  must  be  applied  with  caution  to  specific  indi- 
vidual cases.  It  is  safer  to  make  original  determinations  for  any  given 
farm,  with  due  consideration  to  local  production  and  marketing,  local 
costs  of  equipment  and  operating  expenses,  as  well  as  to  the  extent 
and  kind  of  personal  expenses  to  be  met. 

Again,  while  these  figures  are  based  on  actual  farmers'  experiences, 
one  should  bear  in  mind  that,  during  periods  of  depressed  prices  for 
livestock,  grain,  and  other  farm  crops,  or  in  the  event  of  higher  prices 
for  land,  implements,  or  other  equipment,  or  when  a  higher  interest 
rate  must  be  paid  for  borrowed  money,  or  if  interest  is  demanded  on 
all  moneys  invested,  or  if  the  system  of  land  payments  is  different, 
then  a  longer  time  is  necessary  in  which  to  complete  payments  than 
the  periods  here  set  forth. 

In  studying  the  table,  one  should  bear  in  mind  that  the  word 
"cash"  used  in  the  titles  is  equivalent  to  "needs"  as  given  in  the 
side  headings,  both  referring  to  the  cash  required  to  carry  on  the 
business.  The  presence  of  a  plus  sign  in  the  net  needs  for  any  given 
year  indicates  a  net  sum  in  excess  of  the  annual  gross  expenditures 
for  the  year  in  question  because  receipts  are  larger  than  expenses  for 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    57 

that  particular  period.  Each  business  is  treated  by  itself  in  the  fol- 
lowing paragraphs. 

The  diversified  farm. — The  diversified  farm  is  perhaps  the  more 
important  since  it  represents  a  common  type  on  new  subdivisions. 
The  diversified  farm  means  a  diversity  of  enterprises,  usually  alfalfa 
with  accompanying  dairying,  hog  raising,  sometimes  some  fruit  grow- 
ing or  truck  production,  often  field  crops  or  intercrops,  a  flock  of 
hens,  and  occasionally  minor  industries  such  as  seed  or  berry  growing. 
The  selection  of  enterprises  and  their  combinations  are  very  variable. 

In  the  case  presented  here,  alfalfa  with  a  few  cows,  some  hogs,  and 
a  generous  acreage  in  field  crops  form  the  basis  for  calculating  the 
capital  needs  of  the  diversified  type  of  farming.  The  land,  40  acres 
in  extent,  is  purchased  at  $200  per  acre  under  terms  of  one-tenth 
down,  then  no  payments  other  than  interest  at  6  per  cent  for  two 
years,  the  payment  of  the  balance  in  eight  installments,  with  interest 
at  6  per  cent  on  deferred  payments. 

In  this  instance,  the  period  and  amount  of  greatest  capital  needs 
occurs  at  the  end  of  the  second  year,  and  totals  about  $6900.  From 
then  on,  a  gradual  reduction  takes  place,  the  business  meeting  (except 
during  the  fourth  }^ear)  the  various  capital  demands  of  the  succeeding 
periods,  together  with  an  increasing  surplus  to  be  applied  against  any 
accumulated  debt.  Under  conditions  such  as  these,  the  business  can 
be  ultimately  freed  of  debt,  and,  once  interest  and  land  payments  are 
out  of  the  way,  the  business  will  provide  a  gross  income  of  $3500,  to 
pay  for  operating,  personal,  and  overhead  expenses  amounting  to 
a  total  of  $2000.  The  actual  investment  in  land,  buildings,  and 
equipment  amounts  to  $13,737,  if  interest  on  deferred  payments  is 
not  included.  The  figure  $13,737  is  obtained  by  totaling  the  annual 
expenditures  as  shown  under  "Investments"  in  the  first  part  of  the 
table.  The  sum  remaining  after  deducting  the  expenses  and  overhead 
($2000)  from  the  gross  receipts  ($3500)  leaves  a  balance  of  $1500 
which  can  be  used  as  a  basis  for  estimating  the  interest  upon  the 
investment  obtained  since  all  other  charges  are  cared  for  under  over- 
head. In  this  instance,  it  amounts  to  nearly  11  per  cent.  If  this  rate 
is  deemed  sufficient  to  cover  management  and  interest,  then  the  returns 
are  satisfactory  and  it  seems  safe  to  deduce  that  a  business  such  as 
this,  under  comparable  conditions,  can  pay  out.  But,  if  a  higher  rate 
is  considered  necessary,  then  the  returns  are  not  enough  to  meet  all 
requirements. 


58 


UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 


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CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    61 

Twenty  acres  for  deciduous  fruit. — The  raising  of  fruit,  when 
starting  with  bare  land,  is  a  long-time  proposition,  and  requires 
special  staying  powers  on  the  part  of  the  operator  and,  if  capital  is 
limited,  the  practice  of  prolonged  economy.  In  this  instance,  20  acres 
of  land  are  purchased  at  $250  an  acre,  under  terms  of  one-tenth  down, 
then  five  years  with  no  payments  other  than  interest  on  balance  due. 
Beginning  the  seventh  year,  the  unpaid  balance  is  to  be  discharged 
at  the  rate  of  one-ninth  annually,  with  interest  at  6  per  cent  on 
deferred  payments. 

The  land  is  to  be  planted  with  trees,  intercropped  for  four  years, 
while  a  poultry  plant  of  600  fowls  is  to  be  run  for  five  years,  or  until 
the  first  fruit  receipts  are  obtained. 

The  deciduous  fruit  business  shows  an  increase  in  receipts  over 
capital  needs  during  the  years  when  no  land  payments  need  be  made, 
followed  by  a  gradual  increase  in  the  capital  needs  after  receipts  are 
no  longer  available  from  intercrops  and  poultry  products  and  land 
payments  begin.  This  continues  until  the  twelfth  year,  when  the 
maximum  need  is  reached.  It  should  be  remembered  that  this  study 
covers  only  the  period  for  paying  out  on  the  land,  so  that  if  the  study 
is  continued  to  include  years  when  money  need  not  be  paid  out  to 
cover  land  installments  and  interest  on  deferred  payments,  sums  so 
released  can  be  applied  toward  reducing  the  capital  requirements. 
From  the  twelfth  year  on,  this  column  shows  a  gradual  reduction  of 
invested  capital. 

Even  so,  it  is  sometimes  wise  to  take  advantage  of  land  prices,  and 
to  sell  at  the  period  of  development  when  the  price  which  can  be 
obtained  has  the  greatest  spread  between  the  capital  invested  and 
the  market  price.  Sales  for  profit -making  are  in  line  with  the  method 
used  by  many  farmers  to  increase  their  returns.  At  the  twelfth  year, 
the  time  of  greatest  capital  requirements,  the  investment  and  market 
prices  are  closest  together,  which  means  that  the  cost  of  establishing 
is  nearest  to  the  market  value.    This  is  shown  in  a  later  table. 

Dairy  and  hog  ranch. — The  dairy  and  hog  ranch  is  primarily  an 
alfalfa  ranch  of  30  acres,  utilized  for  12  dairy  cows  and  a  bull,  6  brood 
sows  and  a  boar,  turning  off  butterfat,  calves  and  pork,  raising  alfalfa 
for  pasture  and  hay,  silage  for  feed,  and  purchasing  all  concentrates 
(as  barley)  beyond  the  available  skimmilk. 

The  acreage  is  utilized : 

2  acres  for  farmstead  and  corrals. 

3  acres  for  silage. 
25  acres  for  alfalfa. 


62 


UNIVERSITY  OF   CALIFORNIA EXPERIMENT  STATION 


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CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    63 


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64 


UNIVERSITY    OF    CALIFORNIA EXPERIMENT    STATION 


The  land  is  purchased  at  $200  under  terms  of  one-tenth  down, 
interest  at  6  per  cent  only  for  two  years,  then  balance  in  eight  install- 
ments, with  interest  at  6  per  cent  on  deferred  payments. 

The  •  summarized  findings  are  given  in  the  table  immediately  fol- 
lowing. 

This  business  shows  a  gradually  ascending  need  for  capital  from 
the  third  year  on  to  the  eighth  year,  when  the  receipts  exceed  the 
needs  by  a  few  dollars,  which  applied  to  the  total  gradually  reduces 
the  amount  invested.  The  greatest  need — $7623 — occurs  in  the  eighth 
year.  After  the  eleventh  year,  the  initial  investment  can  be  reduced 
by  applying  sums  heretofore  set  aside  for  land  payments  to  the  invest- 
ment.   If  this  be  done,  the  business  can  be  ultimately  liquidated. 

The  2000-foivl  poultry  plant. — Two  thousand  laying  fowls  is  con- 
sidered by  commercial  poultrymen  to  be  about  the  right  sized  plant 
for  a  family  farm.  The  capital  requirements  of  such  a  plant  are  indi- 
cated below.  Land  is  taken  at  $600  per  acre  without  improvements, 
purchased  under  terms  of  one-sixth  down  and  the  balance  payable  in 
five  annual  installments,  with  interest  at  6  per  cent  on  deferred  pay- 
ments. The  table  shows  the  capital  needs  by  years  and  their  probable 
reduction  from  possible  receipts. 

In  starting,  the  plant  is  equipped  with  1000  laying  fowls,  and  in 
early  spring  2700  day-old  chicks  are  purchased,  which,  after  allowing 
for  mortality  and  roosters,  should  furnish  the  second  1000  pullets. 
The  purchase  of  laying  fowls  takes  place  as  soon  as  the  buildings  are 
ready.  For  the  purpose  of  this  example,  the  purchase  of  fowls  is 
considered  to  take  place  October  1,  building  operations  having  started 
the  previous  July  1. 

TABLE  13 
Summary  op  the  Cash  Requirements  for  a  2000-Fowl  Poultry  Plant  (10  acres) 


Item 


Periods 


1st  year   2nd  year   3rd  year   4th  year   5th  year   6th  year 


Investment 

Operating 

Personal 

Overhead 

Total 

Possible  receipts 

Net  needs  by  years* 

Cumulative  needs 

Time  and  amount  greatest 
need 


$8103 

2581 

1000 

441 

12125 
2500 
9625 
9625 

9625 


$1000 

4491 

610 

381 

6482 

8106 

+  1624* 

8001 


$1000 

4516 

610 

321 

6447 

8106 

+  1659 

6342 


$1000 

4516 

950 

261 

6727 

8106 

+  1379 

4983 


$1000 

4516 

750 

201 

6467 

8106 

+  1639 

3324 


$1000 

4516 

750 

141 

6407 

8106 

+  1699 

1645 


CA  plus  (+)  sign  indicates  receipts  in  excess  of  needs,  to  extent  of  figures  shown. 


CIRCULAR  247]    COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    65 

The  poultry  business,  a  farming  industry  of  relatively  small  acre- 
ages and  quick  returns,  makes  the  best  showing  of  any  of  the  four 
types  of  farming  presented.  The  greatest  need  for  capital  occurs 
during  the  first  year,  from  then  on  being  gradually  reduced  with 
surplus  earnings  available  beyond  the  yearly  needs  of  the  business. 
After  the  sixth  year  moneys  previously  paid  upon  land  installments 
and  interest  on  deferred  payments  becomes  available  for  more  quickly 
reducing  the  initial  investment,  so  that,  with  data  as  used  here,  the 
business  can  pay  for  itself  in  approximately  seven  years. 

Discussion  of  the  findings. — The  tables  show  capital  needs  to  meet 
land  payments,  improvements,  construction,  equipment,  personal  ex- 
penses, replacement  charges,  and  interest  requirements  during  the 
period  of  development. 

Another  step  is  needed  to  determine  the  justification  for  embark- 
ing in  any  of  these  businesses,  to  test  the  soundness  of  the  contemplated 
investment. 

This  is  summarized  below  to  show : 
(a)   Greatest  capital  needs. 

(6)   Returns  after  land  is  paid  for  and  business  fully  estab- 
lished. 

(c)  Necessary  expenditures  after  business  is  fully  established 

to  meet  operating,  personal  and  replacement  expenses. 

(d)  Market  value. 

1 '  Market ' '  value  is  made  up  of  ' '  productive, ""  home ' '  and  ' '  poten- 
tial values. ' '  By  ' '  productive  value ' '  is  meant  that  amount  of  which 
the  net  returns  represent  the  usual  percentage  of  profit  demanded  of 
any  business.  By  "home  value"  is  meant  the  value  of  the  property 
for  use  as  a  home.  The  "potential  value"  takes  into  account  any 
future  increase  in  the  value  of  the  property.  The  total  of  these  three 
gives  the  market  value. 

Note  that  interest  on  operating  capital  is  not  included  in  our  cal- 
culations.    A  just  charge  for  this  can  be  added. 


TABLE  14 

Summary 

of  Capital  Bequirement  Findings 

(Figures  in  round 

numbers  for  ease   in  making  comparisons 

■) 

Business 
40  acre  diversified  farming 

Gross                 Gross  returns 
capital                    after  land 
needs  to                    is  fully 
establish                   paid  for 
$6,800                   $3,500 

Necesary 
needs  after 

business 

is  fully 

established 

$2,000 

Market 

value 

(estimated) 

$16,000 

20  acre  deciduous  fruits  .. 

7,900                     2,500 

1,750 

14,000 

30  acre  dairy  and  hogs  .... 

7,600                    2,600 

1,850 

16,000 

10   acre   poultry 

9,000                    7,200 

5,500 

15,000 

66  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

Limitations  of  average  data. — Caution  should  be  exercised  in 
attempting  to  make  generalizations  from  the  data  here  presented.  A 
recognition  and  understanding  of  the  principles  involved  and  a  work- 
ing knowledge  of  the  method  of  studying  capital  requirements  con- 
stitute the  real  values  to  be  drawn  from  a  perusal  of  this  material. 

Each  suggested  proposition  should  be  tested  out  with  data 
applicable  to  the  property  and  to  the  individual  so  that  the  outcome 
properly  determined  will  decide  the  merits  of  the  contemplated  ven- 
ture, according  to  the  specific  conditions,  desires,  capacities,  and 
requirements  of  all  involved  factors. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    67 


RURAL  PLANNING 
By  J.  W.  GBEGG 


In  this  great  state  of  California,  so  abundantly  supplied  with 
resources  and  natural  beauty,  it  would  be  reasonable  to  expect  that 
every  phase  of  rural  life  would  be  found  developing  in  its  own  ideal 
environment.  In  many  sections  of  California  these  natural  resources 
have  not  been  conserved,  and  in  other  parts  men  have  not  attempted 
to  create  that  landscape  wealth  so  essential  to  their  health,  happiness, 
and  prosperity.  Our  forefathers  in  New  England,  even  while  facing 
problems  involving  their  very  existence,  did  not  neglect  the  develop- 
ment of  their  home  grounds  nor  the  improvement  of  their  towns,  as 
the  beautiful  old  Colonial  gardens  and  stately  American  elms  so 
eloquently  testify.  Not  until  the  struggle  for  independent  national 
life  began,  did  the  evidence  of  this  love  for  gardens  and  well  developed 
home  grounds  begin  to  wane.  Later,  as  the  next  generation  began 
to  move  into  the  west,  the  rancher,  the  truest  home  builder  in  the 
Nation,  found  himself  in  a  new,  undeveloped  part  of  the  country, 
possessed,  often,  of  little  but  his  most  personal  belongings,  yet  he 
found  time  for  the  beautifying  of  home  environment.  Sometimes, 
years  of  toil  brought  improved  economic  conditions,  and  what  had 
been  considered  useless  luxuries  were  recognized  as  most  valuable 
factors  in  the  upbuilding  of  the  individual  home  and  of  the  com- 
munity. 

Times  change,  the  old  order  of  things  in  rural  life  is  giving  way 
to  the  new.  Ideas  and  practices  which  only  a  few  years  ago  were 
thought  to  apply  only  to  the  large  city  or  to  be  possible  for  the  man 
with  capital,  are  now  found  to  be  just  as  applicable  and  just  as  neces- 
sary for  proper  rural  development. 

The  value  of  city  planning  is  now  generally  recognized  because 
people  have  learned  that  "it  is  the  practice  of  doing  things  right"  in 
city  building.  Rural  communities  have  just  as  much  need  to  grow 
and  progress  along  right  lines  as  our  cities.  Good  business  for  the 
city  is  good  business  for  the  country.  Agriculture  is  a  big  business^ 
and  a  well  organized  and  developed  country  life  must  inevitably  help 
to  make  it  a  profitable  and  attractive  business.  Civic  art,  which  is  but 
another  name  for  "the  practice  of  securing  the  maximum  of  utility 
combined  with  the  maximum  of  beauty"  has  never  been  held  in  very 


68  UNIVERSITY  OF   CALIFORNIA EXPERIMENT  STATION 

high  esteem  in  the  country  districts  as  a  whole,  and  little  or  no 
thought  has  been  given  to  the  value  of  convenience  and  beauty  as 
they  materially  affect  the  community  or  the  life  of  the  individual. 
The  average  farmer  has  paid  little  attention  to  the  economic  value 
of  time  as  a  factor  in  the  successful  operation  of  his  business.  Nor 
has  he  thought  seriously  of  the  value  of  attractive  buildings  and  home 
grounds  in  promoting  his  reputation  and  prosperity,  and  even  the 
health  and  happiness  of  his  household. 

The  country  town  has  often  been  slow  to  profit  by  the  best  examples 
of  city  planning,  with  the  result  that  the  growth  of  the  rural  center 
has  been  slow  and  misdirected.  Business  interests  have  not  been 
encouraged  or  protected;  residential  areas  have  never  been  defined 
nor  their  growth  made  orderly  and  attractive.  Serious  traffic  and 
transportation  problems  have  always  existed  in  the  small  rural  town, 
but  their  logical  solution  has  seldom  been  attempted.  Parks,  play- 
grounds, community  centers,  and  even  the  public  school,  the  real  seat 
of  American  sovereignty,  have  all  felt  the  blighting  influence  of 
apathy.  American  life  today,  be  it  assembled  in  the  form  of  city, 
town,  or  rural  district,  is  composed  of  many  diverse  elements,  which 
need  to  be  coordinated  and  brought  together  into  one  harmonious 
whole,  in  order  to  function  properly  for  the  best  interests  of  all. 

Rural  planning  is  far  from  being  a  mere  study  in  landscape  archi- 
tecture or  the  superficial  steering  of  a  community  into  an  agitation 
for  more  beauty.  In  its  careful  analysis  of  the  problems  affecting 
land  values,  business  in  general,  and  the  assurance  of  permanency  and 
growth,  it  concerns  the  pockets  of  every  citizen.  Every  business  man 
is  interested  in  reducing  expenses  and  in  perfecting  an  organization 
that  will  most  efficiently  govern  the  operation  of  his  business:  and 
that  is  rural  planning,  the  application  of  sound  business  principles  to 
the  organization  and  life  of  a  community.  The  elimination  of  waste 
is  the  world's  greatest  scientific  problem  today. 

As  the  farm  home,  so  is  the  community.  The  importance  of  this 
truth  and  its  vital  relation  to  the  wealth  and  happiness  of  the  state 
cannot  have  too  frequent  emphasis. 

In  establishing  a  farm  home,  plans  and  specifications  are  just  as 
necessary  and  essential  at  the  beginning  as  they  are  in  building  a 
house  or  developing  a  city  or  a  town.  As  the  utility,  convenience, 
and  beauty  of  a  structure  are  made  possible  by  the  thought  and  skill 
of  the  architect,  as  expressed  in  diagrams  and  blue  prints,  so  only 
can  the  greatest  utility,  convenience,  and  beauty  of  the  entire  farm 
grounds  be  obtained  by  the  builder  first  creating  in  graphic  form  the 
landscape  and  design  of  the  home  to  be. 


CIRCULAR  247]     COLONIZATION  AND  RURAL  DEVELOPMENT  IN  CALIFORNIA    GO 

Let  us  first  consider,  then,  ' '  Design, ' '  which  in  architecture  means 
"plans  and  specifications,"  and  if  possible  lay  down  a  few  general 
rules  to  guide  us  in  planning  more  convenient,  more  healthful,  and 
more  beautiful  country  homes.  As  one  writer  on  the  "Rural  Home" 
has  very  appropriately  said,  ' '  The  city  may  furnish  hotels  and  board- 


pLAN: 

DELHI 


TOWNSITE 


Fig.  9. — Townsite  of  the  Delhi  State  Land  Settlement. 


ing  houses  and  places  to  eat  meals  and  sleep  nights,  galore,  but  to  my 
mind,  the  word  'home'  is  associated  only  with  the  green  fields  and 
bright  flowers  and  whispering  trees  and  singing  birds;  it  ever  and 
always  recalls  the  orchard,  the  meadow,  the  deep  tangled  wildwood." 
These  general  rules  will  not  give  a  stereotyped  appearance  or  same- 
ness to  all  grounds  designed  by  them;  on  the  other  hand,  they  may 
be  applied  with  all  the  elasticity  needed  to  include  both  the  extremes 
and  means  in  variety  and  shades  of  taste,  as  well  as  in  amount  of 
improvement.    As,  for  example,  you  might  select  one  thousand  modern 


70  UNIVERSITY  OF  CALIFORNIA EXPERIMENT  STATION 

city  houses,  all  with  kitchens,  dining  rooms,  parlors,  halls,  bedrooms, 
and  bathroom  built  according  to  general  architectural  rules,  yet  no 
two  alike. 

Size  of  the  grounds. — The  size  of  the  grounds  should  be  com- 
mensurate with  the  size  of  the  farm,  i.e.,  with  the  farm's  needs  and 
requirements.  A  half-section  stock  farm  should  have  larger  grounds, 
more  yards  and  buildings  than  a  ' '  forty  "  -or  an  "  eighty. ' '  For  the 
smaller  farm  a  five-acre  plot  might  be  sufficient,  the  larger  would 
need  more. 

Building  site. — The  general  topography  of  the  land  should  be 
carefully  surveyed.  A  slightly  rolling  elevation  should  be  chosen  if 
possible,  so  as  to  give  perfect  drainage  and  sanitation,  and  the  building 
so  placed  that  the  drainage  from  the  stables  and  corrals  does  not  run 
toward  the  house.  A  site  should  be  chosen  comparatively  near  the 
highway,  unless  some  elevation,  trees,  or  other  natural  features  make 
another  location  preferable.    An  east  or  south  frontage  is  usually  best. 

Outline  of  grounds. — For  convenience  we  will  consider  the  farm 
grounds  as  made  up  of  five  elements :  driveways  and  yards,  buildings, 
water  system,  orchard,  and  flower  and  vegetable  gardens.  Between 
these  elements  there  should  be  a  proper  relation  and  balance,  both 
with  respect  to  each  other,  and  with  respect  to  the  topography  of  the 
building  site. 

Driveways  and  yards. — After  locating  the  house,  a  spacious  drive- 
way or  open  court,  which  might  be  called  the  farm  yard,  is  the  next 
element  to  be  determined.  It  is  the  essential,  central  element  and 
ratio  factor,  giving  proportion  to  the  whole,  and  making  possible  a 
symmetrical  and  harmonious  arrangement  of  the  buildings,  and 
especially  an  arrangement  convenient  for  handling  that  routine  of 
so-called  "chores,"  which  on  the  average  farm  occupies  from  one- 
fourth  to  one-half  of  the  farm  labor. 

This  open  court  may  be  varied  in  shape  and  design — square, 
rectangular,  L-shape,  or  oval — according  to  the  taste  of  the  builder. 
It  should  be  well  drained  and  may  be  graveled  all  over  or  the  center 
put  in  lawn  or  alfalfa.  The  driveway  from  the  main  road  leads  into 
it  and  from  it  lead  the  minor  drives  and  lanes. 

The  house-yard  or  lawn  should  be  placed  on  one  side  of  the  main 
driveway,  fronting  the  highway  and  extending  back  as  far  as  the  open 
court.  It  should  be  spacious ;  as  one  writer  has  said,  ' '  a  half  acre  is 
not  too  much."    Here  may  be  grown  flowering  plants,  trees,  shrubs. 

Adjoining  the  house-yard  should  be  situated  its  necessary  corollary, 
the  small  fruit  and  vegetable  garden,  and  back  of  these  is  a  very  suit- 
able location  for  the  farm  orchard.     The  other  necessary  farm  yards, 


CIRCULAR  247]     COLONIZATION  AND  RURAL.  DEVELOPMENT  IN  CALIFORNIA    71 

such  as  cattle  yards,  feed  yards,  and  hog  yards  should  be  placed  on 
the  other  side  of  the  grounds,  in  the  rear  of  their  respective  buildings. 
Last,  but  not  least,  every  yard  should  be  thoroughly  and  stoutly 
fenced.  The  farm,  as  well  as  store  or  shop,  needs  ' '  a  place  for  every- 
thing, and  everything  in  its  place. ' '  As  Mr.  Eugene  Secor  in  a  paper 
entitled  "A  Plea  for  the  Farmer's  Front  Yard,"  has  most  aptly 
written,  "Pigs  and  peonies  don't  agree.  Cannas  and  cattle  cannot 
be  raised  on  the  same  lot.  Horses  and  horticulture  should  be  studied 
in  separate  inclosures." 


Fig.   10. — Farmstead  layout  Allotment  No.  38,  Durham  State  Land  Settlement. 


Buildings. — The  modern  tendency  favors  more  and  separate  build- 
ings to  the  combination  of  all  in  one  or  two  large  ones.  They  should 
be  grouped  about  the  farm  yard,  or  open  court,  with  due  thought  for 
convenience,  sanitation,  and  harmony  in  appearance.  The  house 
should  be  toward  the  rear  of  the  lawn  and  comparatively  close  to 
the  * '  farm  yard. ' '  On  the  opposite  side  of  the  open  court,  facing  the 
main  highway,  may  be  placed  the  largest  and  most  attractive  barn. 

On  the  barn  side  would  naturally  come  the  other  barns  and  sheds 
for  housing  the  stock ;  at  the  end  of  the  court,  perhaps,  the  granaries 
and  machine  sheds,  and  on  the  house  side  the  chicken  yards  and  water 
system. 


72  UNIVERSITY  OF  CALIFORNIA — EXPERIMENT  STATION 

The  buildings  should  by  all  means  have  some  system  of  alignment : 
they  should  not  be  "sown  broadcast"  about  the  yards. 

Home  orchard. — The  home  orchard  should  occupy  the  sheltered 
nook  of  a  wind  break,  where  summer's  heavy  winds  are  broken  and 
where  the  yearly  mantle  of  fallen  leaves  gives  a  mulch  and  adds 
humus  to  the  soil. 

Shade  trees. — Shade  trees  should  be  large  and  should  practically 
surround  the  whole  farm  grounds ;  very  light  on  the  south  and  east, 
but  massive  on  the  north  and  west,  or  the  direction  of  the  prevailing 
winds.  The  grove  should  form  the  background  for  all  the  other  farm 
yard  factors,  and  give  to  them  a  setting  dignified  and  beautiful  in 
verdant  bas-relief. 

The  extreme  west  and  north  should  be  walled  with  at  least  two, 
or  better  four,  rows  of  evergreens.  The  deciduous  trees  are  not  suf- 
ficient protection  as  a  windbreak  when  that  protection  is  most  needed. 
The  trees  should  be  placed  far  enough  back  from  the  buildings  to 
allow  plenty  of  sunlight  and  ventilation  to  reach  the  buildings  and 
yards. 

Ornamentation. — A  general  rule  for  ornamentation  as  expressed 
in  the  words  of  a  notable  landscape  authority  is,  "Study  the  most 
satisfying  scenes  in  nature  and  try  to  inject  the  spirit  of  them  into 
the  immediate  out-of-doors  you  call  your  own.  Adapt  walks  and 
drives  to  the  contour  of  the  landscape,  and  buildings  to  their  respec- 
tive locations  and  environment."  The  same  author  has  well  said  of 
the  planting  of  trees  and  shrubs:  "We  violate  the  artistic  sense  of 
proportion  when  we  fill  a  small  lawn  with  large  growing  trees,  or 
ornament  a  large  tract  with  only  shrubs.  The  large  trees  are  too 
heavy  for  the  lawn,  except  when  used  sparingly,  while  shrubs  are  just 
right  when  used  in  abundance.  For  the  large  grounds  shrubs  alone 
are  too  light.  It  takes  the  generous  use  of  trees  to  give  the  richness 
and  weight  needed. ' ' 

Such  ornamentation,  supplemented  by  a  restful  color  scheme  for 
buildings  and  fences,  and  a  general  orderly  appearance  created  by 
good  maintenance  will  do  much  to  make  rural  life  attractive  and  satis- 
fying. 


